This is an appeal from an order made by District Judge Chandler in the Southend County Court on 19 November 2007. The appeal is brought with the district judge’s permission. It is concerned with the extent to which a beneficial tenant in common who continues in occupation of a property following the bankruptcy of the other beneficial tenant in common ought to compensate the bankrupt’s estate for that continued occupation.

The material facts could scarcely be simpler. On 22 May 1992 No. 3 West Park Hill, Brentwood, in Essex, which is a two-bedroomed, semi-detached bungalow, was transferred to the respondents, Peter Francis Barcham and Bernadette Margaret Walsh (as she then was). They were registered with title absolute on 10 June 1992. From the outset of their joint ownership, the property was charged to Woolwich Building Society which was subsequently acquired by Barclays Bank. Barclays is now shown as proprietor of the registered charge. From the time of their acquisition of the property the Barchams, who married in May 2001, made it their home. At all material times they have been in joint occupation of it.

On 10 June 1994 a bankruptcy order was made against Mr Barcham on his own petition. The Official Receiver became his trustee in bankruptcy. He continued as such until August 2004 when the appellant, Jeremy Stuart French, and one other were appointed by the Secretary of State to be joint trustees in his place. Their appointment took effect from 18 August 2004. The appointment empowered either trustee to act in any matter.

On 14 December 2006 Mr French applied to the Southend County Court for orders for the sale of the property, for its possession and for ancillary relief in connection with the sale. He also sought a declaration that the respective interests in the net proceeds of sale should be 50% for himself (as trustee) and 50% for Mrs Barcham. Mr and Mrs Barcham were the respondents to the application.

Following adjournments for the purpose of filing evidence and obtaining a joint surveyor’s opinion on the rental value of the property, the application eventually came on for hearing on 19 November 2007. The dispute was not over the trustee’s entitlement to possession and sale of the property, nor over the beneficial shares in it since it was common ground that the respondents had acquired it as beneficial tenants in common in equal shares, nor over the fact that in consequence of his bankruptcy all those years earlier Mr Barcham’s equitable half share had vested in the Official Receiver and, following their appointment as joint trustees of his estate, in Mr French and his colleague. Rather, the dispute was over what deductions should be made from the trustees’ half share of the net sale proceeds to compensate Mrs Barcham for various payments that she had made and, correspondingly, what if any deductions should be made from her half share of the net sale proceeds to reflect the fact that since Mr Barcham’s bankruptcy she and Mr Barcham had remained in joint occupation of the whole of the property. As the district judge observed:

The district judge accepted Mrs Barcham’s evidence concerning the extent of the payments which she claimed to have made since Mr Barcham’s bankruptcy in respect of the mortgage on the property and on the property itself. He noted that, given that it was accepted that the Barchams had owned the property as tenants in common in equal shares, Mr French conceded that Mrs Barcham was entitled to credit for one-half of those payments. He observed that as a matter of principle Mr French accepted that “subject to a set-off in respect of a charge for use and occupation or an occupation rent” Mrs Barcham should have credit for 50% of those payments against the other half share. He stated that the issue which he had to decide was whether “the trustee” (although there were joint trustees I shall use the singular as did the district judge) “should be entitled to set-off against the claim for payments that had been made by Mrs Barcham a sum for her occupation of the premises”.

He then proceeded to consider that question. In doing so he referred to Byford v Butler [2003] EWHC 1267 (Ch); 1 FLR 56 (a decision of Lawrence Collins J), the decision of the House of Lords in Stack v Dowden [2007] UKHL 17; [2007] 2 WLR 831, Murphy v Gooch [2007] EWCA Civ 603, [2007] BPIR 1123 (a decision of the Court of Appeal), and sections 12 (concerned with the right of beneficiaries to occupy trust land) and 13 (concerned with the exclusion and restriction of such right of occupation) of the 1996 Act, and in particular section 13(6) which enables compensation to be awarded to a beneficiary whose entitlement to occupy land under section 12 has been excluded or restricted. He concluded that, in the light of what was said by Baroness Hale in Stack v Dowden about the operation of the 1996 Act, anyone seeking compensation for a restriction or exclusion of the right to occupy must fall within the statutory regime set out in the 1996 Act, but that a trustee in bankruptcy did not. As he put it:

His order, after directing a sale of the property and setting out how that should be effected, ordered the net sale proceeds to be distributed between Mr French and Mrs Barcham in equal shares subject to Mrs Barcham being credited with half of the mortgage instalments and insurance premiums paid in respect of the property since the date of the bankruptcy order (with liberty to apply to determine the amounts in question) and half of £4,383, being the cost of works which she had carried out to the property. Reflecting his judgment, the order did not provide for any offset against Mrs Barcham’s share on account of her occupation of the property. As I have mentioned, he gave Mr French permission to appeal.

The grounds of appeal raise two matters: (1) the correctness of the district judge’s conclusion that Stack v Dowden provides an exhaustive code for when compensation by a beneficiary in occupation of property under a trust of land is payable in respect of that occupation to another beneficiary under the same trust who is not in occupation and his finding, consequent on that conclusion, that as Mr Barcham’s trustee in bankruptcy from time to time never qualified under that code he was not entitled to any compensation and (2) the correctness of the district judge’s acceptance of Mrs Barcham’s evidence that it was she who had made all the payments for which she was seeking a 50% credit. As to the first matter the district judge, it is said, should have held that the 1996 Act had no application and that, in accordance with well established principles, Mrs Barcham’s share of the net proceeds was liable to be debited with an occupation rent in favour of Mr Barcham’s bankruptcy estate. As to the second of those matters the district judge, it is said, should have found that Mrs Barcham was only entitled to a credit for one half of those payments that could be evidenced by reference to her bank statements.

In the event the appeal was pursued only in respect of the first of those two matters. For her part, Mrs Barcham served a respondent’s notice seeking to uphold the district judge’s decision for reasons additional to those given by him.

Sections 12 to 15 provide as follows:

The submissions of Mr Stephen Davies QC, who appeared with Mr Stefan Ramel for the appellant trustee, may be summarised as follows. Sections 12 and 13 of the 1996 Act, and in particular the power of the court to order compensation under section 13(6), are directed to the case where, as section 13(1) makes clear, “two or more beneficiaries are (or apart from this subsection would be) entitled under section 12 to occupy land”. They do not apply - and, in consequence, the observations in Stack v Dowden on their operation have no relevance - to the case where, although there is more than one beneficiary entitled to an interest in possession under a trust of land, not all of the beneficiaries have a statutory entitlement to occupy that land under section 12. The beneficial half share in the property to which at the time of his bankruptcy Mr Barcham was entitled has at no stage given his trustee in bankruptcy (or the creditors in that bankruptcy) any entitlement under section 12 to occupy the property. Instead, Mr French’s entitlement to credit for an occupation rent in respect of Mrs Barcham’s occupation of it following Mr Barcham’s bankruptcy and her entitlement to credit in respect of payments made by her of the mortgage instalments and for other matters fall to be determined pursuant to the principles worked out in Re Gorman (A Bankrupt) [1990] 1 WLR 616, Re Pavlou (A Bankrupt) [1993] 1 WLR 1046 and Byford.

The district judge fell into error in concluding that an occupation rent (or compensation for occupying the property) is payable by a beneficiary with a right of occupation of property subject to a trust of land only where section 13(6) of the 1996 Act applies and that Stack v Dowden is to that effect. He was therefore wrong to find that because a trustee in bankruptcy of a beneficiary under a trust of land has no right of occupation under section 12 he has no entitlement to any compensation for the continued occupation of the property by the other beneficiary. Following the line of authority culminating in Byford, he should have directed a set-off of an occupation rent against the payments for which Mrs Barcham was entitled to a credit, at least to the extent of the mortgage interest payments that she had paid.

The submissions of Mr Alexander Learmonth for Mrs Barcham may be summarised as follows. The former practice of requiring a beneficiary in occupation of trust property to give credit, by way of an occupation rent, for his continued occupation of the property has, in the light of the approach of the House of Lords in Stack v Dowden to the operation of sections 12 to 15 of the 1996 Act, been wholly replaced by the compensation regime conferred by those provisions and the district judge was right so to conclude. That regime applies to all cases where there is a trust of land, ie to all cases where there is more than one beneficiary entitled to an interest in possession in respect of the land in question. Although in his capacity as trustee in bankruptcy for Mr Barcham he had an interest in possession under a trust of land, Mr French had (and has) no right to occupy, and neither did the Official Receiver at any time when acting as his trustee. This is because the purposes of the trust did not include making the land available for the trustee’s occupation and also because the property was neither available nor suitable for occupation by him. In any event, there has been no attempt or desire by Mr French to take up occupation of the property. Indeed, until shortly before the appointment of Mr French and his colleague, neither they nor the Official Receiver has ever sought possession of the property. Parliament would scarcely have carefully delimited the circumstances in which the right to compensation under section 13 is available if it intended that the former jurisdiction would continue to apply in all other circumstances. The reasoning in Byford which enabled a trustee in bankruptcy to claim an occupation rent against a beneficial co-owner in occupation of the trust property must therefore be treated as overruled. That this is the correct scope and effect of the statutory provisions contained in the 1996 Act is supported by Murphy v Gooch [2007] EWCA Civ 603; [2007] BPIR 1123. It is consistent with the current policy of Parliament as appearing from the amendment to the Insolvency Act 1986 effected by the Enterprise Act 2002 inserting section 283A of the 1986 Act. It follows therefore that there was no jurisdiction to award an occupation rent (or compensation as section 13(6) describes it) and the district judge was correct in the conclusion which he reached.

Even if, contrary to the district judge’s conclusion, there remains scope for awarding an occupation rent under the pre-1996 Act law where compensation under section 13(6) is unavailable, the circumstances in which such a jurisdiction should continue to be exercised require re-evaluation in the light of the 1996 Act. Compensation under section 13(6) is only available where the statutory entitlement of a beneficiary to occupy land has been “excluded or restricted”. The touchstone for an occupation rent even before the passing of the 1996 Act was that the co-owner seeking to be credited with such a rent had been ousted or excluded from his entitlement to occupy the land in question. As a trustee in bankruptcy has no right to occupy there can be no question of him being treated as ousted or excluded with the result that, even if the 1996 Act does not directly apply, the conditions for an award of an occupation rent do not exist.

In so far as Byford suggests that an occupation rent may be charged notwithstanding that the trustee in bankruptcy of the bankrupt beneficiary under the trust for sale has never in any sense been excluded from the property, it was wrongly decided. The true principle established by the case law on the circumstances in which an occupation rent might be charged has been that of ouster, ie actual or constructive exclusion of one beneficiary from occupation of the property by another. The mere fact that one beneficiary occupies the land in question to the exclusion of the other does not give rise to any right of compensation.

Further, even if sections 12 to 15 of the 1996 Act do not provide exhaustively for the circumstances in which a beneficiary in occupation of property under a trust of land can be required to compensate another beneficiary under the same trust who is not in occupation and Byford was correctly decided, the question whether an occupation rent or its equivalent should be awarded is a matter of discretion where the court is free to form its own conclusion as to what is just and equitable in the light of the particular facts of the case. On the facts of the instant case, which are distinguishable from Byford, no occupation rent should be charged. The decision of the district judge can therefore be supported for those additional reasons.

I do not accept that sections 12 to 15 of the 1996 Act provide an exhaustive regime for compensation for exclusion of a beneficiary from occupation of property held subject to a trust of land. An essential prerequisite of the power to award compensation under section 13(6) is the entitlement under section 12 of the beneficiary claiming the compensation to occupy land, ie the right of that beneficiary to occupy the land at any time by reason of that interest. What triggers the award of compensation is the exclusion or restriction of that right of occupation. Where, as is common ground, a person such as a trustee in bankruptcy who is entitled for the benefit of the bankrupt’s creditors to an interest in possession of land subject to such a trust has no such right of occupation (and neither do the creditors), there is no scope for the operation of section 13. I do not therefore accept that, because Mr Barcham’s trustee in bankruptcy has had no statutory right of occupation (a matter which, given the terms of section 12(2), Mr Davies readily conceded), Mrs Barcham was not liable to be charged an occupation rent (or, if one prefers so to describe it, equitable compensation) for her occupation of the property from the time that Mr Barcham’s beneficial interest in the property vested in his trustee in bankruptcy.

I do not consider that anything said by the House of Lords in Stack v Dowden leads to a different view of the scope of those provisions. That case was principally concerned with the criteria for the determination of the property rights of a cohabiting couple in the home which they had occupied. There was also an issue over whether Ms Dowden should be required to compensate Mr Stack for the cost to him of certain alternative accommodation following his exclusion from the property which he had been sharing with Ms Dowden and their children. In the course of dealing with that question, Baroness Hale set out (at [93]) the relevant provisions of sections 12 to 15 and stated (at [94]) that “these statutory powers replace the old doctrine of equitable accounting under which a beneficiary who remained in occupation might be required to pay an occupation rent to a beneficiary who was excluded from the property”. She stated that “the criteria laid down in the statute should be applied, rather than in cases decided under the old law …”. But it is important to note that she referred to both parties having a right of occupation. It was in that context that she was addressing her remarks. I do not understand her to have been suggesting that in cases where one of the parties has no statutory right of occupation, the statutory provisions have the effect that that party can no longer claim an occupation rent in any circumstances whatever. Lord Neuberger, who was the only other member of the House in Stack v Dowden to express any view on the question of compensation under section 13 referred (at [150]) to “The court’s power to order payment to a beneficiary, excluded from property he would otherwise be entitled to occupy, by the beneficiary who retains occupation” (emphasis added) as being governed by sections 12 to 15 of the 1996 Act. He was, in my view, careful to emphasise that the jurisdiction applies only where the beneficiary claiming the compensation has been excluded from the property that he would otherwise be entitled to occupy.

Finally, I do not accept Mr Learmonth’s submission that it would make nonsense of the statutory regime contained in the 1996 Act if the regime were not exhaustive of the entitlement to compensation for exclusion from occupation. As worded the power to award compensation under section 13(6) is only exercisable as a condition to be imposed on the occupying beneficiary in relation to his occupation of the property in question. See section 13(3). It appears to look at the matter prospectively in the context of the occupying beneficiary’s continued occupation. It is not difficult, especially if that view of section 13(6) is correct, to envisage cases of exclusion where both beneficiaries had a right of occupation yet where the statutory regime would not seem to be applicable. Where the scheme applies, it must be applied. But where it plainly does not I do not see why the party who is not in occupation of the land in question should be denied any compensation at all if recourse to the court’s equitable jurisdiction would justly compensate him.

It follows, in my view, that the district judge was wrong to find that because Mr Barcham’s trustee could not establish an entitlement to compensation under section 13(6) his application to be credited with an occupation rent necessarily failed. What then should he have ordered?

This brings me to Mr Learmonth’s alternative arguments for supporting the district judge’s decision. Stripped to their essentials those arguments are threefold. The first is that, even if the 1996 Act does not provide exhaustively for when an occupation rent (strictly, compensation) may be awarded, it colours the approach to be adopted in those cases where the statutory regime does not directly apply and requires that there must be something in the nature of exclusion of the non-occupying co-owner who has a right of occupation of the property. But, as the trustee in bankruptcy has none, there can be no case for saying that he has been excluded. The second is that, even if the 1996 Act is wholly disregarded, the law properly understood has always required something in the nature of an exclusion from occupation of the non-occupying co-owner before the occupying co-owner can be required to pay an occupation rent whereas in the present case there is nothing that has occurred which can be said to amount to exclusion. The third argument, raised in response to reliance by Mr Davies on behalf of Mr French on the decisions in Gorman, Pavlou and Byford, is that those decisions fall to be reconsidered in the light of Stack v Dowden and that, in any event, Byford was wrongly decided but also that, even if Byford was not wrongly decided, the question whether an occupation rent should be paid is, on the authorities, one of discretion and the discretion should be exercised in this case by refusing to require Mrs Barcham to account for an occupation rent.

At common law it was undoubtedly a requirement that ouster of one co-owner by another (both having a right to possession of the property in question) had to be shown before the ousted co-owner could bring an action against the ousting co-owner to recover possession and damages, including mesne profits (or, in other words, an occupation rent) for the property. Without actual ouster of the one co-owner by the other any liability to pay an occupation rent simply did not arise. See, for example, Jacobs v Seward (1872) LR HL 464 at 472. This, the position in law, was reflected in the following passage from the judgment of Lord Denning MR in Jones (AE) v Jones (FW) [1977] 1 WLR 438 at 441 to which Mr Learmonth referred me:

But that left for determination what would amount to ouster (or exclusion) so as to give to the tenant in common who was out of occupation a claim for compensation against the tenant in common who remained in occupation. The approach to this inquiry, which was adopted in the courts of equity, was summarised in the following passage from the judgment of Purchas J in Dennis v McDonald [1982] Fam 63 at 70 to 71:

In Dennis v McDonald there was a dispute between former cohabitees over whether their jointly owned property should be sold and, if not, whether any and what occupation rent should be paid by the party who had remained in occupation and continued to pay the mortgage instalments. The claimant applied under section 20 of the Law of Property Act 1925 for an order for the sale of the property. Purchas J declined to order a sale. But he went on to acknowledge that where, as was the position in that case, the co-owners were married or cohabiting and the relationship had broken down the question whether the co-owner not in occupation had left the property voluntarily or (to put the same point in different language) had been excluded from the property had to be viewed in a practical manner. As he put it (at 71):

The correctness of this approach was not called into question by the Court of Appeal (see [1982] Fam 63 at 91) when the case went to appeal (and the decision of Purchas J was affirmed). On appeal the issue was as to the quantification of the payment which Purchas J had ordered the occupying co-owner to pay; liability to pay an occupation rent was no longer in dispute.

The result in that case was that the defendant could remain in occupation if he paid the claimant an amount equal to half the fair rent for the property. A similar provision was included in the order made in Bernard v Josephs [1982] Ch 391 where cohabiting parties had separated and there was a dispute over what their shares were in the property where they had been living, and whether a sale should be ordered.

Those were disputes arising out of a breakdown in relationship between occupying co-owners. There was no need to consider how the principle stated by Purchas J should be applied where one of the co-owners was made bankrupt and his beneficial share in the property vested in his trustee in bankruptcy. This brings me conveniently to the trilogy of bankruptcy cases to which I was referred in argument, namely Gorman, Pavlou and Byford.

In Gorman husband and wife had jointly acquired property with the aid of a mortgage but had later split up and divorced. The husband was subsequently made bankrupt. The main issues argued in that case concerned the shares in which the property was beneficially owned, whether there should be a sale and, if so, what adjustments should be made to the division of the net sale proceeds (after discharging the outstanding mortgage) to reflect the fact that the wife had paid the mortgage instalments. The case does not assist on whether, following the husband’s bankruptcy, it was appropriate for the wife who remained in occupation to be charged with an occupation rent. This is because it was conceded by counsel for the wife that the trustee was entitled to claim an occupation rent for the period after the making of the receiving order in bankruptcy (this being a bankruptcy under the Bankruptcy Act 1914). That said, it was a concession which the court did not question.

In Pavlou, husband and wife bought a house which they occupied as their matrimonial home. Their purchase was with the assistance of a mortgage. On completion the property was transferred to them as beneficial joint tenants. Ten years later, in 1983, the husband left. The wife remained in sole occupation of the property and paid the mortgage instalments as they fell due. She also paid for repairs and improvements to the property. In March 1986 she petitioned for divorce and in July 1986 obtained a decree nisi. That same month, July 1986, a creditor of the husband presented a petition for his bankruptcy. In March 1987 a bankruptcy order was made and a trustee in bankruptcy appointed. This had the effect of severing the beneficial joint tenancy so that thereafter the property was beneficially owned in equal shares.

In proceedings brought by the trustee for sale of the property and other relief an issue arose as to the date from which there should be (as it was common ground that there should be) equitable accounting between the parties on the division of the net sale proceeds of the property. Millett J, after setting out the facts and explaining the nature of the equitable accounting which should take place, turned to what he described (at 1049D) as “the more difficult questions” arising from the wife’s continued occupation of the property, in particular whether she was chargeable with an occupation rent in respect of any period prior to the date of the bankruptcy order. He then referred to the judgment of Purchas J in Dennis v McDonald (and also to an observation of Stirling J in Hill v Hickin [1897] 2 Ch 579 at 581) and continued (at 1050D) as follows:

It is evident that whether in that case the wife should be liable for an occupation rent in the period between the husband’s departure and the date of presentation by her of a divorce petition turned on whether, in the sense referred to by Purchas J in Dennis v McDonald, the husband should be treated as excluded from the property. Millett J considered that the presentation of the divorce petition by the wife, being the party who remained in occupation, might be taken to signify a refusal to take the other party back into the matrimonial home and her willingness to pay an occupation rent thereafter. In so stating he was venturing a view on the application to the facts of what he had earlier referred to as “the true position”: had the husband left voluntarily or was he to be regarded as excluded from the house?

What the decision does not explain, but appears to assume (see the final sentence of the passage cited from Millett J’s judgment), is that the obligation on the wife’s part to pay an occupation rent continued after her husband’s bankruptcy in March 1987 when his beneficial share of the property vested in his trustee.

The question is whether that was a correct assumption. Mr Learmonth submitted that the trustee was allowed to claim an occupation rent because he stood in succession to and in place of the husband who was to be regarded as excluded from the house. I do not think that this is a correct understanding of why the wife’s obligation to pay an occupation rent continued after the husband’s bankruptcy. Material to this is to note how, in Dennis v McDonald, Purchas J stated the underlying principle. It is that the occupying tenant in common is only free of any liability to pay an occupation rent if the tenant in common not in occupation is in a position to enjoy the right to occupy but voluntarily chooses not to do so. This approach was followed by Millett J in Pavlou in his reference to what he described as “the true position”. The essential point, in my view, is that when on inquiry it would be unreasonable, looking at the matter practically, to expect the co-owner who is not in occupation to exercise his right as a co-owner to take occupation of the property, for example because of the nature of the property or the identity and relationship to each other of the co-owners, it would normally be fair or equitable to charge the occupying co-owner an occupation rent. This proceeds from the fundamental position in law, explained by Lord Denning MR in the passage from Jones (AE) v Jones (FW) set out above, that as between tenants in common both are equally entitled to occupation and one cannot claim rent from the other, which has the result that the mere fact that the one is in occupation and the other is not does not without more give to the one who is not in occupation any claim to an occupation rent from the one who is in occupation. The underlying assumption is that there is no good reason why the non-occupying co-owner should not take up occupation. But if there is some reason why that co-owner is not in occupation and it would be unreasonable in the circumstances for him to take up occupation fairness requires the occupying co-owner to compensate the other for the fact that the one has enjoyment of the property while the other does not.

When a trustee in bankruptcy has been appointed of the estate of a co-owner so that that co-owner’s interest vests in the trustee, but the other co-owner remains in occupation of the property, application of the principle will ordinarily, if not invariably, result in the occupying co-owner having to account to the trustee of the beneficial interest to which the bankrupt co-owner was formally entitled for an occupation rent. This is because it is not reasonable to expect - even if it were otherwise practicable for him to do so - the trustee in bankruptcy to exercise the right of occupation attaching to the interest in the property that vested in him on his appointment as trustee of the bankrupt co-owner. If it could be shown that the occupying co-owner was given by the trustee to understand that no occupation rent would be charged or was unaware of, and had no reasonable means of discovering, the other co-owner’s bankruptcy, the court might take the view that it would not be just to require the occupying co-owner to pay an occupation rent. But short of such circumstances it is difficult to see why the occupying co-owner should not be charged an occupation rent.

That brings me to the decision in Byford, the facts of which bear a close resemblance to those of the present case. In Byford Mr and Mrs Byford purchased a property in joint names and made it their matrimonial home. Five years later, in June 1991, Mr Byford was adjudicated a bankrupt. The Official Receiver was appointed his trustee in bankruptcy but took no steps to realise Mr Byford’s half share in the property. The Byfords continued to live at the property until Mr Byford’s death in December 2000. In April 2001 a new trustee in bankruptcy was appointed in place of the Official Receiver. There was an issue over whether Mrs Byford should be entitled to any credit for the mortgage interest payments made by her following her deceased husband’s bankruptcy. In the court below the district judge held that Mrs Byford was entitled to a credit for the improvements she had made to the property and for the mortgage interest instalments which she had discharged but also that the trustee was entitled to a set-off for an occupation rent. Mrs Byford appealed against so much of the decision as required her to be charged an occupation rent. It had been agreed between the parties in the court below that if an occupation rent was payable it should be treated as extinguishing the credit to which Mrs Byford was entitled for having discharged the mortgage interest payments.

Lawrence Collins J dismissed the appeal holding (at [41]) that “where Mrs Byford seeks and obtains an account of interest payments, the trustee is entitled to a set-off for occupation rent”.

In the course of his judgment Lawrence Collins J reviewed the authorities culminating in Pavlou and concluded (at [40]):

Mr Learmonth advanced three criticisms of that decision. First, he said, the judge appears to have treated the trustee there as having been excluded in that he “cannot reside in the property nor can he derive any financial enjoinment from the property while the bankrupt’s spouse resides in it” when there was never anything to prevent the trustee applying to realise the property or from entering into a formal arrangement for the payment of rent; second, he said, it was wrong to treat the continued occupation of either or both spouses as in any way referable to (meaning, as I understood it, causative of) the trustee’s exclusion; third, the decision was, he said, incompatible with the principle, reaffirmed in Dennis v McDonald, that exclusion (or something equivalent to it) of a co-owner by the occupying co-owner was necessary if an obligation to pay an occupation rent was to be triggered.

I do not accept that there is force in those criticisms. The fact that there was never anything to prevent the trustee from applying to realise the property or from entering into a formal rental agreement does not detract from the fact that, from a practical and commonsense point of view, he could not reside in the property. Moreover, the same could be said of any co-owner who has been excluded from occupation of a property: he can apply to the court for an order for sale to enable him to realise his share of it. Mr Learmonth’s second and third criticisms look at the concept of exclusion too narrowly. Exclusion in the sense in which it was explained in Dennis v McDonald and Pavlou looks at a state of affairs: the question is whether in the circumstance it is reasonable for the trustee to exercise his right as a co-owner to take occupation of the property. It does not assist to look at the matter as one of causation by considering whether the occupation of the one is causative of the exclusion of the other.

It follows, in my judgment, that, far from being wrongly decided (as Mr Learmonth submitted), the decision in Byford was, with respect, entirely correct in principle.

Mr Learmonth nevertheless submitted that insofar as Gorman, Pavlou and Byford suggest an approach to the charging of an occupation rent which differs from the regime contained in sections 12 to 16 of the 1996 Act, as explained by the House of Lords in Stack v Dowden, those decisions should no longer be regarded as good law. He pointed out that Pavlou and Byford were cited by Lightman J (with whose judgment Sedley and Mummery LJJ agreed) in Murphy v Gooch but without any suggestion that the non-binding guidelines or rules of convenience (as Lightman J referred to them) set out in those cases would continue to apply post-Stack v Dowden. I do not agree. In that case both parties had a right of occupation of the property in dispute so that the provisions of sections 12 and 13 of the 1996 Act were directly in point. Although she had not claimed compensation under the 1996 Act in the court below but had claimed an occupation rent as part of the process of equitable accounting, Ms Murphy, who had not been the party in occupation following the break-up of their relationship, was entitled to a credit in respect of the continued occupation of the property by Mr Gooch following the break-up. Lightman J referred to Pavlou and Byford but not, as I read the judgment, for the purpose of disagreeing with what was said in those cases but because the matter had been argued in the court below on the footing that the principles of “equitable accounting” as they had developed over the years were applicable, including in particular that aspect of the principles which, where appropriate, allowed for the charging of an occupation rent. This is evident from the last sentence of paragraph 10 of the judgment. Lightman J went on to refer to the decision of the House of Lords in Stack v Dowden which had been delivered after the decision in the court below and to the fact that no mention had been made in the court below of the 1996 Act. He then proceeded to reconsider and determine afresh the issues raised by reference to the criteria laid down by the 1996 Act. I see nothing in the judgment of Lightman J to suggest that in cases other than those expressly covered by the 1996 Act the pre-existing principles of equitable accounting (so far as relevant to determine when and to what extent a charge should be made for an occupation rent) should not continue to apply. There was certainly no disapproval of Pavlou or Byford. In my view, Murphy v Gooch does not assist Mrs Barcham.

Whether on the facts of this case, Mrs Barcham should be charged with an occupation rent is, as Mr Learmonth correctly submitted, ultimately a matter of discretion. He relied on the same points that were urged, unsuccessfully, in support of the wife in Byford. I will not repeat them. They are set out in paragraphs [14] and [15] of Byford. Mr Learmonth sought to distinguish the facts in Byford from those in the present case where Mr Barcham’s occupation, following his bankruptcy and until May 2001, could not be by virtue of Mrs Barcham’s interest in the property, since they were not married during that period, but because his trustee in bankruptcy did nothing to remove him from the property. In Byford, by contrast, the Byfords were already married by the time of Mr Byford’s bankruptcy.

There are, so far as I can see, no relevant factual differences between this case and Byford. The fact that the Barchams did not marry until seven years or so after Mr Barcham’s bankruptcy is not a material distinction. The plain fact is that Mr Barcham continued to live in the property by virtue of his wife’s interest in it; the fact that he may have had no right in law to do so prior to their marriage is immaterial.

Of course it does not follow that because the facts of this case are materially indistinguishable from the facts of another that the decision in this case will necessarily be the same as in that other. But it does entail that some valid ground for departing from the decision in that other case, assuming it applied the correct principles, should be established. I am not persuaded that there is any such ground. I was furnished with figures to indicate that Mrs Barcham’s share in the net proceeds following a sale will result in her receiving a relatively modest sum if her half share is to be debited with half of the property’s letting value from time to time since Mr Barcham’s bankruptcy even if she is credited with half of the mortgage instalments since the bankruptcy. Sympathetic as I am to the Barchams’ plight, a sympathy which is increased by the current difficulties in the property market, I do not consider that the financial outturn to Mrs Barcham can be material. That outcome is no more than a reflection of fluctuating property values. If it is otherwise right to charge her with an occupation rent, it cannot in principle matter what the impact would be of so doing on the share that she could otherwise expect to receive.

I have therefore come to the conclusion that the appeal succeeds and that, on sale of the property, Mrs Barcham’s half share is liable to be reduced by a sum equal to one half of the property’s letting value from time to time since Mr Barcham’s bankruptcy. Mr Davies said that the trustee would not seek to claim an overall figure for occupation rent which exceeds one half of the mortgage and insurance payments for which Mrs Barcham claims to be credited. I shall therefore declare that Mrs Barcham’s half share falls to be reduced to that extent but no more. As I have earlier mentioned, there is, in the event, no appeal against Mrs Barcham’s entitlement to claim for the mortgage instalments (all or substantially all of which were by way of interest) and the other payments to which I have referred.