Kuldip Kaur Chhokar v Harbhajan Singh Chhokar

When exercising the discretion under section 30 of the Law of Property Act 1925 in relation to a trust for sale of a matrimonial or family home, the court must consider the trust’s underlying purpose. Unless unusual circumstances or special considerations exist, it should not order a sale that would prevent continued occupation. Children are not beneficiaries, but their accommodation needs are relevant. Third-party interests must be weighed by considering whose voice ought to prevail in equity. An innocent co-tenant occupying the home should not ordinarily pay occupation rent to a third party who cannot occupy it. An appellate court may intervene where relevant factors were omitted, irrelevant factors considered, or the weighing exercise was clearly wrong.

The wife appealed from parts of an order made by Mr Justice Ewbank on 24 January 1983 concerning the former matrimonial home. The order required the property to be sold after nine months and required the wife to pay occupation rent to the third party, Parmar. Parmar cross-appealed against the declaration that the wife and Parmar held equal beneficial shares, seeking credit for the discharge of the mortgage.

The judge had found the conveyance to Parmar reviewable under section 37 of the Matrimonial Causes Act 1973, but declined to set it aside because of resumed cohabitation. That decision was not appealed. The central issues were whether sale should be ordered under section 30, whether occupation rent was payable, and how the mortgage payment affected the parties’ beneficial interests.

Lord Justice Cumming-Bruce gave the substantive judgment. Mr Justice Reeve agreed and observed that the legal submissions below had been cursory. The appeal and cross-appeal were both allowed.

1. In relation to the sale of the property, the court held that a trust for sale of a matrimonial home is not governed by inflexible rules. The court must consider the underlying purpose of the trust. Unless unusual circumstances or a special consideration exist, sale should not be ordered if it would frustrate the beneficiaries’ or one beneficiary’s continued occupation of the property as a matrimonial or family home. Children are not beneficiaries under the trust, but their accommodation needs are a relevant consideration.
2. Third-party interests must also be considered. Applying the approach in Re Holliday [1981] 1 Ch. 405 and In re Turner (A Bankrupt) [1974] 1 WLR 1556, the court must consider the voice of each party and decide whose voice ought to prevail in equity. Here, the wife’s continued occupation and the subsisting matrimonial-home purpose outweighed Parmar’s interest. His participation in the fraudulent transaction, eviction attempts and vandalism made the equitable balance especially clear.
3. The judge had been entitled to exercise a discretion, but his stated reason for ordering sale was legally insufficient. The husband’s return to the home and the fact that Parmar would otherwise be providing accommodation free of charge were not relevant reasons for terminating the wife’s occupation. The appellate court was therefore entitled to intervene under the applicable Wednesbury principles.
4. The wife was not required to pay occupation rent to Parmar. She was an innocent equitable tenant in common, while Parmar stood in the shoes of the former legal owner and could not himself occupy the matrimonial home. The occupation-rent order was deleted. The wife was, however, ordered to account for £585, representing Parmar’s half share of rent received from Mrs Sangha, with that sum to be deducted from damages payable by Parmar.
5. The declaration of equal beneficial shares was maintained. The interests were equal subject to the mortgage as at the creation of the trust. Since the mortgage had been discharged, Parmar was entitled to credit for £8,895.01 on a future sale.

The order was varied accordingly. The appeal and cross-appeal were allowed with costs, subject to legal aid taxation.

• Court of Appeal (Civil Division) — In [1983] EWCA Civ 7, the wife’s appeal and Parmar’s cross-appeal were allowed with costs.
• High Court, Family Division — Mr Justice Ewbank ordered sale of the property after nine months, required the wife to pay occupation rent, and declared equal beneficial shares subject to the cross-appeal issue concerning mortgage credit.