Bilal Ali (as Personal Representative of Farzand Ali (Deceased)) v Laith Khatib (as Personal Representative of Fateh Bibi (Deceased))
| Jurisdiction | England & Wales |
| Judge | Lady Justice Asplin,Lord Justice Stuart-Smith,Lady Justice Andrews |
| Judgment Date | 08 April 2022 |
| Neutral Citation | [2022] EWCA Civ 481 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2021-000710 |
[2022] EWCA Civ 481
Lady Justice Asplin
Lord Justice Stuart-Smith
and
Lady Justice Andrews
Case No: CA-2021-000710
(Formerly A3/2021/1383)
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE AT CARDIFF
BUSINESS AND PROPERTY COURTS IN ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE (ChD)
His Honour Judge Milwyn Jarman QC
PT-2020-CDF-000001
Royal Courts of Justice
Strand, London, WC2A 2LL
Clifford Darton QC (instructed by Berry Smith LLP) for the Appellant
John Sharples (instructed by Petersons Solicitors) for the 2 nd, 3 rd and 4 th Respondents
The 1 st Respondent did not appear and was not represented
Hearing date: 17 March 2022
Approved Judgment
This judgment was handed down remotely by circulation to the parties' representatives by email, and release to BAILII. The date and time for hand down is deemed to be 11.30 a.m. on Friday 8 April 2022 .
This appeal raises issues in relation to when occupation rent is payable and the circumstances in which new points can be argued on appeal.
Background
The issues arise in the context of a long-running family dispute about the administration of the estate of Mrs Fateh Bibi (“Mrs Bibi”) and, in particular, a property comprised within that estate. The property at 149 Corporation Road, Newport, South Wales, (the “Property”), was the family home of Mrs Bibi and her husband, Mr Mohammed Ali (“Mr Ali”). They lived there with their children, Farzand Ali, Mohammed Ramzan, Mohammed Iqbal, the Third Respondent, and Parveen Iqbal, the Fourth Respondent. The children all moved out except for Mohammed Ramzan. He and his wife, Mrs Shanaz Akhtar Ramzan, the Second Respondent, continued to live at the Property, with Mohammed Ramzan's parents, and brought up their children there.
Mr Ali died on 22 August 2003 and Mrs Bibi died on 11 July 2006. Their son, Farzand Ali, died in March 2020. His estate is represented by his son who is his personal representative, the Appellant, Dr Bilal Ali. Mohammed Ramzan, Mr Ali and Mrs Bibi's third son, died in May 2013. Shanaz Ramzan is a party to these proceedings, both as her husband's personal representative and in her personal capacity.
Title to the Property was transferred to Mr Ali by his son Farzand Ali, in 1986. On Mr Ali's death in 2003, title to the Property passed to his wife, Mrs Bibi. As I have already mentioned, she died in 2006. Under Mrs Bibi's will dated 2 October 2003, (the “2003 Will”) the Property was bequeathed and devised to her son Mohammed Ramzan absolutely. It was not until 2011, however, that the legal title to the Property was registered in Mohammed Ramzan's name. The Ramzan family have remained in occupation of the Property throughout.
In 2012, Farzand Ali commenced probate proceedings in relation to Mrs Bibi's estate. The 2003 Will was raised in the Defence and was subsequently alleged to be invalid. On 24 January 2014, His Honour Judge Milwyn Jarman QC (the “judge”) made an order in those proceedings pronouncing against the 2003 Will and in favour of Mrs Bibi's previous will dated 7 January 1997 (respectively the “2014 Order” and the “1997 Will”). The 2014 Order also provided, amongst other things, that there be liberty to apply for an account for use and occupation of the Property.
In April 2016, the judge made a further order appointing the First Respondent, Mr Laith Khatib, as Mrs Bibi's personal representative in place of the Third Respondent, Mohammed Iqbal. Probate was granted to Mr Khatib in respect of the 1997 Will in March 2017. Mr Khatib has not been represented before us, nor did he appear in person.
Under the 1997 Will, after payment of her debts, taxes, funeral and testamentary expenses, Mrs Bibi left all her real and personal property whatsoever and wheresoever absolutely to her husband. If he predeceased her, which he did, she gave all her property absolutely and in equal shares to her children, each of whom were named.
The Part 8 proceedings which give rise to this appeal were commenced by Farzand Ali in January 2020. Orders were sought, amongst other things, for the sale of the Property with vacant possession, that Shanaz Ramzan deliver up vacant possession of the Property to enable the sale to take place and that she account to Mr Khatib, as Mrs Bibi's personal representative, in respect of the occupation of the Property by Mohammed Ramzan and by herself from the date of Mrs Bibi's death until vacant possession was delivered up.
Part of the claim was settled on the terms set out in a Memorandum of Agreement dated 29 January 2020. It provides, amongst other things that: the Second, Third and Fourth Defendants (Shanaz Ramzan, Mohammed Iqbal and Parveen Iqbal) would pay £80,000 to the First Defendant (Mr Khatib) in consideration for their purchase of the Property from Mrs Bibi's estate; and Mr Khatib would pay that sum to Farzand Ali. It was stated that that sum would “satisfy the Claimant's [Farzand Ali's] capital entitlement to the Property as an heir of the estate” and “compromise his claim to purchase the Property from the estate”. However, the Memorandum also provides that: “It [the payment of £80,000] shall not prejudice any beneficial entitlement the Claimant [Farzand Ali] has to occupation rent (if any) owed by the Second Defendant [Shanaz Ramzan] to the estate to which he may be entitled as an heir.”
The terms of that agreement were set out in the schedule to an order dated 17 February 2020 which was sealed the following day. It is referred to in the first recital to a consent order dated 10 September 2020, (the “2020 Order”). The second and third recitals were in the following form:
“AND UPON the Second Defendant acknowledging that she is liable on behalf of herself and of the Estate of Mohammed Ramzan Deceased, to account to the Estate of Fateh Bibi Deceased for use and occupation of the property situated at 149 Corporation Road in Newport, for a period and in an amount to be determined by the Court if not agreed
AND UPON the parties agreeing to instruct a Single Joint Expert to determine the level of occupation rent which should be paid in respect of the property …”
By the 2020 Order, the proceedings were stayed to enable the parties to instruct a single joint expert to give effect to the terms already agreed and to attempt to settle those issues which remained outstanding. The Claimant's solicitors were required to write to the court by a prescribed date, stating whether the case had settled in full and if not, whether a further stay was sought or that the matter be set down for a costs and case management conference. The case did not settle. An expert's report was duly obtained and the matter was heard by the judge. He gave judgment orally on 15 July 2021, having heard the evidence and submissions the previous day.
The judgment
In the light of the nature of the grounds of appeal, it is important to have a good grasp of the judgment.
Having recorded that part of the claim had been settled, the judge stated that the settlement payment of £80,000 “was expressed to be without prejudice to any beneficial entitlement to occupation rent “if any” owed by Mrs Ramzan to Mrs Bibi's estate to which he [Farzand Ali] may be entitled to as an heir”. He then addressed the second recital to the 2020 Order at [9], in the following way:
“The recital to that order referring to that agreement recorded that Mrs Ramzan acknowledged that she is liable on behalf of herself and her late husband's estate to account to Mrs Bibi's estate for use and occupation of the property for a period and in an amount to be determined by the Court if not agreed. The former solicitor of the Second to Fourth Defendants signed that agreement on her behalf, but she says that was done without her knowledge or authority because her family was in Pakistan at the time. However, Mr Sharples, on her behalf, accepts that there was ostensible authority on the part of the solicitor, as solicitor on record, to sign on her behalf but, if necessary, she now seeks to withdraw that acknowledgement.”
The judge then noted that the main principles in relation to the award of occupation rent were not in dispute, although their application was, and went straight on to consider the case law in relation to occupation rent in the context of occupiers of jointly owned property and their trustees in bankruptcy ([11] – [18]).
The judge's conclusions were that: occupation rent is a form of equitable accounting ([11]); that at common law, one tenant in common is not entitled to rent as against the other unless there has been an ouster ([12] – [14]) — Jones (AE) v Jones (FW) [1977] 1 WLR 438 and Dennis v McDonald [1982] Fam 63; the issue has arisen in the context of bankruptcy where trustees in bankruptcy have sought rent from the occupier of property jointly owned with the bankrupt ([15]); a court of equity will order an enquiry and payment of occupation rent not only where a co-owner has been ousted but also in any case in which it is necessary to do equity between the parties ([16] –[17] – Re Pavlou [1993] 1 WLR 1046 and Murphy v Gooch [2007] EWCA Civ 603); and that the default position is that occupation rent is not payable and, accordingly, there should be some conduct by the occupying party, or feature relating to them which makes it fair to depart from the default position ([18] — Davis v Jackson [2017] EWHC 698). The judge then recorded that counsel for the Claimant accepted that the facts were not that of a “classic constructive ouster”...
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