Akhtar v Hussain

For permission to appeal in a beneficial-ownership dispute, a party cannot introduce after trial a case that was not seriously run below. Such a case is too late and has no real prospect of success on appeal. In equitable accounting between co-owners, mortgage interest paid from public funds is neutral and is ignored. Ordinary maintenance costs may also be ignored where they are an incident of occupation and were incurred without the other owner’s knowledge, consent or approval. Occupation rent must reflect only the non-occupying co-owner’s beneficial share. Thus, where the property’s monthly rental value is £350 and the parties each hold 50%, the occupation rent cannot exceed £175 per month.

The parties were former unmarried co-occupiers of a property in Bradford and were registered as joint proprietors. One party left with the children in 1997. The Bradford County Court, in an order dated 9 December 2011, held that the parties were beneficially entitled to equal shares, rejected allegations of proprietary estoppel, estoppel by convention and an original tenancy in common, and made an equitable accounting order. It also ordered the occupying party to pay £350 per month during postponement of sale.

On oral renewal of an application for permission to appeal, the appellant challenged the beneficial-share finding, the treatment of mortgage interest and maintenance costs, and the amount of occupation rent. The central issue was whether any ground had a real prospect of success.

The application for permission to appeal was refused on grounds 1 and 2 and granted on ground 3.

1. Beneficial shares. The argument that the parties’ shares crystallised when one party left was not seriously run at trial. It was therefore too late to advance that case after the trial and judgment. The appellant’s reliance on Jones v Kernott [2011] UKSC 53, said to be substantially on all fours, did not alter that conclusion. The trial judge had clearly had in mind the principles laid down in Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432. There was no real prospect of a successful appeal on this ground.
2. Equitable accounting. Mortgage interest paid from public funds was properly treated as neutral between the parties and ignored. It was not to be treated as a contribution by the occupying party. Ordinary maintenance costs, as distinct from capital improvements, were also properly ignored. They were a necessary incident of continuing occupation and had been incurred without the other party’s knowledge, consent or approval.
3. Occupation rent. The £350 monthly figure failed to account for the occupying party’s own 50 per cent beneficial interest. Occupation rent could relate only to the enjoyment of the part attributable to the other party’s share. If the proper rental value was £350 per month, the rent could not exceed £175 per month. Permission to appeal was therefore granted on this ground alone.

• Court of Appeal (Civil Division): On 17 July 2012, an oral renewal of the application for permission to appeal was refused on grounds 1 and 2 and granted on ground 3: [2012] EWCA Civ 1170.
• Bradford County Court: HHJ Spencer QC made an order dated 9 December 2011 concerning equal beneficial shares, equitable accounting and occupation rent.