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04 JUL 2008

BANKRUPTCY: French v Barcham [2008] EWHC 1505 (Ch)

(Chancery Division; Blackburne J; 4 July 2008)

The trustee in bankruptcy did not apply for sale of the bankrupt's matrimonial home, although 50% of the equity vested in the trustee, until 12 years after the bankruptcy order was made. During that time the wife continued to occupy the property. When the order for sale was made, the judge ordered the trustee in bankruptcy to account to the wife for 50% of the mortgage and insurance payments she had made in the period since the bankruptcy, but refused to order the wife to pay the trustee an occupation rent.

If it would be unreasonable, looking at the matter practically, to expect a co-owner to take occupation of the property, it would normally be fair and equitable to charge an occupation rent. It was not reasonable to expect a trustee in bankruptcy to take occupation, therefore a trustee in bankruptcy would normally be entitled to charge a wife in this situation an occupation rent, and there was no reason not to do so in this case. The occupation rent was set at one half the letting value of the property since the husband's bankruptcy, not to exceed 50% of the mortgage and insurance payments paid by the wife in the same period.

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