Baynton-Williams v Baynton-Williams

In assessing an account for rent-free occupation, the relevant measure is the value to the occupier of using the property in its actual condition. The court should not assume that hypothetical repairs were carried out where there is no factual basis for doing so. A property which is unfit to let may nevertheless provide occupation value if it remains habitable. That value is a matter for judicial assessment, informed by market evidence but adjusted for the property’s defects and facilities. Interest is discretionary. Delay in seeking payment and an excessive pre-action demand may affect the date from which interest runs and the appropriate rate.

The claimant and defendant were brothers and equal beneficiaries of their late mother’s estate. The defendant occupied the deceased’s property from April 2009 until its sale in June 2015. The court had previously required him to account for that rent-free occupation. The remaining issue was the amount payable, having regard to the property’s poor condition, including the later loss of heating, hot water and toilet facilities, and the appropriate award of interest.

1. The defendant was required to account for the value of his occupation, but that value was the value to him of using the Property in the condition in which he occupied it. There was no legal basis for assuming that repairs had been carried out, particularly where the evidence showed that funds were unavailable. The expert’s hypothetical repaired-property calculation therefore provided very limited assistance.
2. The Property was unfit to let and had no ordinary letting value. Accordingly, Swordheath Properties v Tabet [1979] 1 WLR 285 was not relevant. That did not mean that the occupation had no value. The Property remained habitable and provided accommodation, washing and cooking facilities, and, for part of the period, heating and hot water.
3. The court assessed occupation value by judgment, using the expert’s rental figures only as a starting point and applying substantial discounts for the Property’s condition. The period was divided between the time when the boiler functioned and the later period when heating and hot water were unavailable and the toilet also ceased to function. The total value was assessed at £53,878. As the defendant was liable for one half, the amount payable was £26,939.
4. Interest was discretionary under the equitable jurisdiction and/or section 35 A of the Senior Courts Act 1981. The governing principle was compensation for being kept out of money which ought to have been paid, as stated in London, Chatham and Dover Ry Co v South Eastern Ry Co [1893] A.C. 429. Because the claimant delayed pursuing the claim and initially made an excessive demand, interest ran from 28 days after issue of the claim. The appropriate rate was 1%, reflecting the likely return on funds held in an interest-bearing account.