CH-2025-000012 and CH-2025-000014 - [2025] EWHC 2697 (Ch)

Dealing with the claim for possession, in paragraph 94 of the Judgment, the Judge said:

“I consider the loans to be an entirely separate matter to the basis of their [Mr and Mrs Gold’s] occupation of the Property. Notice has been given to quit - the Golds must quit the Property which they now occupy as trespassers. I will make a possession order in the claim but will hear submissions about the terms of such order.”

If it is right that the service of the notice to quit, which expired on 2 June 2021, meant that Mr and Mrs Gold became trespasses as from that date as the Judge appears to have found, then DFH, as freehold owner, would be entitled to a sum representative of the market rent as damages without proof of loss – see Swordheath Properties Ltd v Tabet [1979] 1 WLR 285 at 288E-F. For reasons that are not clear, the Judge did not make any determination in respect of the claim for damages as from 2 June 2021, although the Order that she made recorded an agreement between the parties that Mr and Mrs Gold should be entitled to occupy the Property as licensees until 10 January 2025, paying £100 per day for the use and occupation thereof.

There was no expert evidence before the Court, although there was included within the hearing bundle a marketing report prepared by Gibbs Gillespie, Estate Agents, dated 18 January 2021 recommending placing the Property on the market for let, at that time, at a rental price in the region of £2,500-£3,000 per calendar month.

Subject to the point raised on behalf of Mr and Mrs Gold that I will return to, having found that Mr and Mrs Gold had been trespassers as from 2 June 2021, I consider that the Judge should have awarded damages referable to a market rent as from that date.

On behalf of Mr and Mrs Gold it is submitted that even if such is my finding, I should dismiss this Ground of Appeal on the basis that there is no evidence before the Court as to rental value. An option would be to refer the matter back to the Judge to determine the appropriate level of damages. However, I am concerned that this would be a disproportionate exercise, and that I should do the best I can on the materials available to determine the market rental, but having regard to the fact that the onus was on DFH to place the appropriate evidence before the Court below, I consider that my task is to seek to arrive at an irreducible minimum on the evidence before me.

The £100 per day agreed between the parties equates to the higher of the monthly rental figures recommended by Gibbs Gillespie, but their recommendation is nearly 5 years old and recommended a price to market the Property for rent rather than providing a valuation as such. However, taking into account the recommendation on the part of Gibbs Gillespie, and what was agreed between the parties with regard to a licence figure going forward, I consider that I can safely conclude that the market rental value of the Property will have been no less than £2000 per month since June 2021, and that I can award damages on the basis of this figure. On my calculations, this comes to something in the region of £84,000 for the period from June 2021 to the date of the Judgment. Thereafter, I consider that it be appropriate to apply the rate agreed between the parties of £100 per day.

However, this point ties in with the Possession Issue, raised by Ground 2 of the cross-appeal. The point taken by Mr and Mrs Gold is that if there was the quid pro quo as found by the Judge relating to the friendship between the parties, the occupation of the Property by Mr and Mrs Gold rent-free, the loans made by Mr and Mrs Gold, and the fact that the latter were interest free, then it must be implicit at least that DFH should not be entitled to recover possession of the Property without the loans first being repaid.

Mr Taylor, on behalf of Mr and Mrs Gold relies upon a plea by DFH and Mr Daniel in paragraph 5d of the Re-Amended Reply to Amended Defence and Defence to Counterclaim in relation to an agreement that included for Mr and Mrs Gold to occupy the Property, that:

“Accordingly, the Agreement could not be terminated by the Claimant or Mr Daniel whilst there was a balance due to the Defendants in the Loan Account.”

It is submitted that it would now be inconsistent with that plea for DFH to have been entitled to terminate Mr and Mrs Gold’s licence to occupy the Property without repaying the loans.

In reaching a decision on the question of trespass in paragraph 94 of the Judgment, the Judge did so on the basis that the loans were an “entirely separate matter” to the basis of Mr and Mrs Gold’s occupation of the Property. Unfortunately, this is, seemingly, inconsistent with her findings in paragraph 45 of the Judgment with regard to a quid pro quo which touched upon Mr and Mrs Gold’s occupation of the property and the loans, and paragraph 85 where the question of interest was found to be an element of the quid pro quo, hence her finding that the parties had not intended that interest would be payable on the loans.

So far as the pleading point referred to in paragraph 32 above is concerned, Mr Thakerar fairly makes the point in his Skeleton Argument that the “Agreement” referred to as pleaded out in paragraph 5 of the relevant pleading was one under which rent was to be payable which, although not immediately payable, would accrue as against, and therefore be open to be set off as against the outstanding loans. However, on the basis of the quid pro quo as found, under which it is not open to DFH to offset a market rent as against the loans, it is submitted that it would make little sense if DFH was unable to recover possession of the Property in order to realise the same in order to repay the loans, which is the net effect of the contention that DFH is not entitled to possession unless and until the loans are repaid.

I consider that the answer to this must be that it was open to either party to determine the informal quid pro quo on reasonable notice, and that on either party giving reasonable notice, DFH will become entitled to possession of the Property, the loans would be repayable, and interest at a commercial rate would accrue thereon going forward. To the extent that the quid pro quo might have the formality of a contractual agreement, I consider that it would be necessary to imply a term to this effect in order to give the same business efficacy, and that the form of indefinite arrangement contended for by Mr and Mrs Gold lacks business efficacy.

In short, therefore, I consider that the Judge was wrong not to award damages for trespass as against Mr and Mrs Gold, and I therefore allow Ground 2 of the appeal. In reaching this conclusion, I have not had to disturb or interfere with any findings of fact made by the Judge.

A consequence of my reasoning behind allowing Ground 2 of the appeal is that that Ground 2 of the cross-appeal raising the Possession Issue must be dismissed on the basis that such reasoning depended upon DFH becoming entitled to possession of the Property in June 2021.