Bilal Ali (as personal representative of Farzand Ali (Deceased)) v Laith Khatib (as personal representative of Fateh Bubu (Deceased)) & Ors.

An appellate court should refuse a new point where it would change the nature of the claim, require different evidence and argument, and necessitate a retrial.

A co-owner in occupation does not ordinarily owe occupation rent merely because another co-owner is absent. An award requires conduct by the occupier, or another feature concerning that occupier, which makes payment fair and equitable. The inquiry is fact-sensitive and permits broad justice between the co-owners. There is no special presumption that occupation rent is payable to a trustee in bankruptcy or to a person said to be analogous to one.

The appeal arose from long-running probate litigation concerning a family home forming part of Fateh Bibi’s estate. Following the invalidation of a later will, the property was held for the deceased’s children in equal shares. Mohammed Ramzan and, after his death, his widow Shanaz Ramzan remained in occupation.

Part of a Part 8 claim was settled by payment for Farzand Ali’s capital interest, while preserving any entitlement to occupation rent. The High Court rejected a claim for occupation rent and statutory compensation, finding neither exclusion nor conduct making an award equitable. On appeal, the claimant sought to advance a new trespass and mesne-profits basis and challenged the conclusions on occupation rent.

1. Appeal dismissed. The court refused permission to advance the proposed trespass and mesne-profits argument. Although an appellate court has a broad discretion, the proposed point was not merely a new legal characterisation. It would have required the claim to be recast, different defences and evidence to be considered, and a retrial. That outcome was inconsistent with justice and the overriding objective, applying FII Group v HMRC [2020] UKSC 47.

2. The consent order did not establish an unconditional liability for occupation rent. Read with the memorandum of agreement, its reference to an account for occupation rent was expressly conditional upon rent being due “if any”. The judge was therefore entitled to determine that no liability arose, or that any award should be nil.

3. The statutory claim also failed. The judge’s unchallenged findings entitled him to conclude that Farzand Ali had not been excluded from, or had his shared right to occupy restricted in respect of, the property. The fact that occupation would have been unrealistic for him did not itself show exclusion by the occupiers.

4. The starting point at common law and in equity is that a co-owner in occupation does not pay occupation rent merely because another co-owner is absent. Equity may depart from that position where ouster, relevant conduct by the occupier, or another feature concerning the occupier makes payment fair. The court approved the approach in Davis v Jackson [2017] EWHC 698, consistently with In re Pavlou [1993] 1 WLR 1046.

5. The court rejected a presumption derived from French v Barcham [2009] 1 WLR 1124 that occupation rent is ordinarily payable where a trustee in bankruptcy cannot occupy. There is no special bankruptcy rule. The court must do broad justice on the individual facts and may take account of capital appreciation, delay in sale, and sums received for the beneficial interest. The judge was entitled to take a broad view of the £80,000 payment and the property’s increased value, and to decline an award.

1. Court of Appeal (Civil Division) — Dismissed the appeal and upheld the refusal of occupation rent and statutory compensation: [2022] EWCA Civ 481 .

2. High Court of Justice, Cardiff Business and Property Courts, Property Trusts and Probate (ChD) — His Honour Judge Milwyn Jarman QC rejected the claim for occupation rent and statutory compensation in an oral judgment on 15 July 2021. No citation is stated in the judgment.