Kemp v Kemp

Whether one tenant in common should pay an occupation rent is determined by considering all the circumstances and deciding whether payment is fair and reasonable. Relevant matters may include true exclusion, use of the property, and the benefits and burdens arising from a family business.

Laches requires more than delay. The question is whether it would be inequitable to permit the claim. Prejudice is the primary, though not exclusive, consideration. A person seeking an equitable remedy such as occupation rent must assert the claim promptly and effectively. Very substantial delay, coupled with the death of witnesses able to address the relevant agreements and communications, may make the defence conclusive.

The claimant, Cecil Kemp’s widow and executrix, and the defendant, his brother, were tenants in common of a family property. The claimant sought an order for sale under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The defendant counterclaimed for an occupation rent for Cecil’s occupation of part of the property between 1974 and 1985.

The Norwich County Court gave judgment for the claimant and dismissed the counterclaim, holding that occupation rent was not fair and equitable and, alternatively, that the claim was barred by laches. Permission to appeal was refused by the county court and subsequently by Sedley LJ on paper. The central issues were whether the occupation-rent test had been applied too stringently and whether the delay and resulting prejudice barred the claim.

1. Disposition. Lord Justice Peter Gibson refused permission to appeal out of time. The proposed appeal had no real prospect of overcoming the laches conclusion.
2. Occupation rent. The court stated that the question whether an occupation rent should be payable between tenants in common requires consideration of all the circumstances, to determine whether payment would be fair and reasonable. Relevant matters could include whether there was true exclusion, whether the non-occupying owner had sought to use the property, and the parties’ arrangements in a family business. The family business, the salaries paid to the defendant and Arthur, Cecil’s assumption of business risk, and the apparent absence of substantial profits were capable of bearing on fairness. The court did not need finally to decide that issue. Sedley LJ had regarded it as arguable that the county court applied a test more stringent than the authorities indicated, including Dennis v McDonald [1982] Fam. 63 and Re Pavlou [1993] 1 WLR 1046.
3. Laches. Delay is relevant but is not, by itself, sufficient. The essential question is whether it would be inequitable to allow the claim. Prejudice is the primary ingredient, although other circumstances must also be considered. A person seeking an equitable remedy such as occupation rent must act promptly and assert the claim effectively.
4. Application. The defendant waited approximately 26 years after the alleged agreement to pay rent and 15 years after Cecil ceased occupying the property. The delay continued until after both Cecil and Arthur had died. They might have given direct evidence about the alleged agreements, statements and communications, but could no longer refute the defendant’s account. The laches defence was therefore available even though other findings had rejected the claim on its merits. Family ownership and the possibility of waiting until sale did not justify the delay, since the defendant could have sought a sale and benefited from his increased interest in the property.
5. Order. Application refused.

• Court of Appeal (Civil Division): Sedley LJ refused permission on paper. On renewed application in open court, Lord Justice Peter Gibson refused permission to appeal out of time: [2002] EWCA Civ 610.
• Norwich County Court: His Honour Judge Barham gave judgment for the claimant and dismissed the defendant’s counterclaim for occupation rent on 31 January 2002.