Possession Claims: Appeal as to whether Trustee in Bankruptcy was entitled to evict them from property without a Court Order (Brake and others v Chedington Court Estate Ltd – 2022)

This Court of Appeal decision follows our report on the High Court’s judgment in this case earlier this year.

The High Court found in favour of the defendant company, deciding that the licence to occupy had not been lawfully granted and that the company had been entitled to take possession of the property. The occupiers appealed.

The background

The background of Brake and others v Chedington Court Estate Ltd [2022] is detailed further in our earlier report.

The Brakes, together with a third individual, held the paper title of a cottage in trust for a partnership which was in administration. The Brakes continued to occupy the cottage following the administration in order to carry on the partnership’s wedding business, but were eventually evicted from the cottage. Their claim for unlawful eviction sought possession of the property, claiming that a licence had been granted to them under the partnership agreement and further that the trustee in bankruptcy and the defendant company colluded in order to claim that the company had acquired title to the property.

The Brakes’ possession claim failed in the High Court, which stated that the defendant company had a better title to the property than the Brakes. The Brakes’ claim was deemed a claim in ejectment – a claim that seeks to restore possession of a property to the party entitled to it – whilst the defendant was a licensee of the trustee in bankruptcy, which was the property’s beneficial owner. The defendant had taken possession of the cottage and the High Court found that this was sufficient to take precedence over the Brakes’ claim. The Brakes’ appealed to the Court of Appeal.

The decision

The Court of Appeal allowed the appeal in part, finding that the defendant had been wrong to interfere with the Brakes’ exclusive possession of the cottage without first obtaining a court order. However, no further relief was granted to the Brakes.

The Court considered a number of points:

1. Whether the High Court was right to dismiss the Brakes’ claim. The Brakes’ argued that the trustee in bankruptcy should have obtained a court order to dispossess them of the property because they were two of three registered proprietors of the legal title and physically occupied the cottage.

The key question for the court was which of the parties held a better title to the property. The Brakes’ did not have a beneficial interest in the cottage; the partnership’s beneficial interest had passed to the liquidators, and any personal beneficial interest held by the Brakes’ passed to the trustee in bankruptcy. The Court of Appeal agreed that they were bare trustees for the trustee in bankruptcy; the Brakes argued that, nevertheless, the trustee in bankruptcy was unable to dispossess them and a court order was required.

The trustee in bankruptcy had authorised the defendant to take possession of the cottage, taking a ‘self-help’ remedy to recover possession. The Court of Appeal found that the trustee in bankruptcy did not have an absolute right to do so without involvement of the courts, finding in favour of the Brakes.

2. Whether the High Court was right to dismiss the Brakes’ claim under the Protection from Eviction Act 1977, having found that they were not residing in the property.

The Court of Appeal referenced many cases which determined whether a property was occupied as a ‘home’, finding that continued physical presence was not required. However, the High Court had been right in this case to find that, at the date of the eviction, the Brakes had not continually occupied the cottage as their home; the Brakes had been unable to prove to the Court of Appeal that the High Court’s determination that the cottage was not their home was wrong.

Advice and action for landlords

The Court of Appeal’s decision found that the Brakes had been unlawfully evicted. The Brakes enjoyed exclusive possession of the cottage, and the trustee in bankruptcy and defendant company were not entitled to interfere with this without a court order.

Reversing the High Court’s earlier decision on this point, a ‘self-help’ approach in this case was not accepted by the court and a court order was necessary to authorise the eviction on consideration of the title and position of both parties.