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

Fecha: 20-Oct-2025

Rent Issue

Rent Issue

16.

The crux of the Judge’s decision in respect of this issue is in paragraph 45 of the Judgment where she considered it more likely than not that Mr Daniel agreed with Mr and Mrs Gold that they could move into the Property as a quid pro quo to the assistance that they were giving with large loans at the time, and by way of giving something back to their friendship. The Judge explained that: “This is one of the accounts that [Mr Daniel] has provided and I believe it is the one which is more likely than not to be correct”. She went on to explain as part of her reasoning that she did not accept Mr Daniel’s and Mrs Rigg’s evidence that there was an agreement that the rent would be set against the loans because she was satisfied if there had been such an agreement, both of them would have been able to tell her what the market rent was, what the “mates rates” alleged to have been agreed was, and also because the rent accruing and being set off against loans would have been meticulously documented by Mrs Rigg and visible in the accounts, which DFH would have disclosed to support their case on this point.

17.

The gist of Mr Thakerar’s case on this point was to the effect that there had been no evidence from Mr and Mrs Gold that it had been agreed that they could occupy the Property rent free because their evidence had been to the effect that they owned the Property beneficially, and that there was no other evidence to support the finding that no agreement had been reached regarding the payment of rent.

18.

Insofar as the Judge had preferred the one particular account that Mr Daniel had provided as to what had been agreed, Mr Thakerar argues that this account came from what Mr Daniel had said in a witness statement dated 28 July 2020 made in support of an application to set aside a statutory demand served by Mr and Mrs Gold, and that on proper analysis what Mr Daniel had said in this witness statement does not support the Judge’s finding because her finding did not accurately reflect what Mr Daniel has said in this witness statement.

19.

In paragraph 16 of his witness statement dated 28 July 2020, Mr Daniels said: “Buying houses is an expensive business and 28 Rogers Lane has been a drain since the start, but I look at it as an investment and paying back the Golds in the way that I can, letting them live rent free as a quid pro quo for money is lent to me.” It is apparent from paragraph 35 of the Judgment that this is the passage that the Judge particularly relied upon in coming to the conclusion that she did, because she has highlighted it. However, Mr Thakerar submits that if paragraph 16 is considered in context and having regard to what is said elsewhere in this witness statement, it does not support the finding that the Judge came to based upon it.

20.

In particular, Mr Thakerar points to earlier in paragraph 16, where Mr Daniel had said that: “once loans were still outstanding, rent is accumulating”. Further, he refers to paragraph 12 of the witness statement where Mr Daniel refers to Mr and Mrs Gold asking, “whether they could rent [the Property] instead, which I agreed,” and then went on to say that Mr and Mrs Gold had resided at the Property since early 2007 and had not paid any rent at all. I note further that in paragraph 20 of the witness statement; Mr Daniel asserts an entitlement to set rent off against the outstanding loans as a basis for challenging the statutory demand.

21.

There is force in the particular points that Mr Thakerar makes with regard to Mr Daniel’s witness statement dated 28 July 2020, and other parts of the witness statement are consistent with Mr Daniel meaning by reference to “rent free”, in the final sentence of paragraph 16 thereof, not that no rent would become due at all, but that there would be no obligation to pay rent on an ongoing basis on the basis that accruing unpaid rent would ultimately be applied or set-off against outstanding loans. However, in order to succeed on this ground, Mr Thakerar would need to show that these other parts of the witness statement dated 28 July 2020 so fundamentally undermined the Judge’s reasoning on this issue that it can properly be said that she was plainly wrong and came to a conclusion that no reasonable judge would have come to.

22.

On proper analysis, I do not consider this can be so said for the following reasons:

The onus of proof plainly was on DFH and Mr Daniel to prove that an agreement was reached with Mr and Mrs Gold to the effect that rent would be payable, a task not aided by the fact that the Judge found Mr Daniel to be an unreliable witness, and her finding, which is not challenged, that there was no AST agreement providing for payment of rent in a particular amount despite the assertion by DFH and Mr Daniel that there was.

ii)

The Judge was faced with difficulty that Mr Daniel was an unreliable witness, who had given various accounts of the circumstances which were said to have given rise to an obligation on the part of Mr and Mrs Gold to pay rent. The final sentence of paragraph 16 of the witness statement dated 28 July 2020 does use the expression “rent free”, which is, on a natural reading, inconsistent with any obligation to pay rent at all. To this extent, the witness statement dated 28 July 2020 might properly be considered to be ambiguous as to what Mr Daniel might actually have agreed with Mr and Mrs Gold, as opposed to what, with hindsight, he might now think that he had agreed. In the circumstances, I consider that the Judge was entitled to rely upon the final sentence of paragraph 16 of the witness statement in concluding that no agreement had been reached for Mr and Mrs Gold to pay rent.

iii)

Michael Green J, in granting permission to appeal, regarded it as a “surprising conclusion” to have reached that Mr and Mrs Gold were not obliged to pay rent for their 14 years of occupation of the Property yet could still recover their loans in full. However, this has to be viewed in the context of the Judge’s other findings in relation to the a quid pro quo under which Mr and Mrs Gold, then very good friends of Mr Daniel and who had lent very significant sums of money, were to be permitted to live at the Property, which extended to her finding that the loans were interest free. With regard to interest on the loans, I note that, in paragraph 85 of the Judgment, the Judge explained her conclusion in relation thereto on the basis that the loans … “were provided within the course of the very close relationship between Mr Daniel and Mr Gold, in the context of benefit being provided by DFH and Mr Daniel in terms of assistance with property transactions which had made the Golds over £1m, and accommodation been provided in the Property for which no rent was chargeable.”

iv)

The Judge supported her conclusion in paragraph 45 of the judgment with the well-made points that if there had been an agreement that rent would be set off against the loans, then:

Mr Daniel and Mrs Rigg might have been expected to have been able to say what the market rent was and what the “mate’s rates” agreed was;

The rent accruing for set-off against the loans would have been documented rather than left vague and uncertain, in circumstances in which loans were made to both DFH and Mr Daniel personally,

I must bear in mind that the key witnesses will have been cross-examined on the various factual issues that arose, and the Judge will have had the opportunity of assessing that evidence in a way that is simply not open to me. The evidence will have included an examination of the relationship between the parties, from which the Judge will have been able to come to her conclusion that there had been the quid pro quo that she held that there was.

vi)

In Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 at [114], Lewison LJ observed that: “In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.” I am concerned that in attaching the weight that Mr Thakerar invites me to do two other parts of Mr Daniel’s witness statement dated 28 July 2020, I would be “island hopping” in the “sea of evidence” before the Judge, and I consider that there was sufficient evidence before the Judge to entitle her to come to the conclusion that she did.

23.

Consequently, I will dismiss DFH’s and Mr Daniel’s Ground 1 of their appeal.