Within wills and estate disputes a common issue that arises is what to do with an unwanted occupant of a property. Carneys Lawyers’ wills and estates and property dispute lawyers frequently advise clients (in capacities as executors or beneficiaries to a will) in circumstances where a person has lived in a property for many years and not paid market rent.
While there are often valid reasons for a person to live in another’s property without paying rent, in some cases the unwanted occupant has taken advantage of the owner, to the detriment of others (such as beneficiaries of the deceased owner’s estate). In such a case the executor may consider suing the occupant for damages in respect of the unauthorised occupancy.
One particular type of damages available to an owner of land is “mesne profits”. Mesne profits is an ancient but relatively rarely used measure of damages for trespass to property, developed in medieval courts. Shortly put, this is a monetary remedy for the use of the plaintiff’s land by the defendant during the period of the trespass.
Typically this measure of damages will be sought where the plaintiff with the right to exclusive possession has in fact suffered no loss, or less loss than is represented by a “rent” or “hiring charge” for the land on which the trespass has occurred.
The New South Wales Court of Appeal recently handed down a significant decision concerning mesne profits, in which the Court analysed the history of the head of damages and identified that the fundamental feature that is seen in the historical emphasis on a trespassing defendant being required to give up “profits” derived from the trespasser’s use of the property (Sydney Local Health District v Macquarie International Health Clinic Pty Ltd  NSWCA 274, at ).
Practically, the usual measure of damages for or by way of mesne profits will be the market rent for the premises or for the hire of the goods in their state during the period of the trespass. The calculation of that market rent must have regard to the particular context of the case and characteristics of the property or goods in question, for instance variable rent calculated by reference to a holiday season (SLHD v Macquarie International, at ).
It may be possible in some cases to show that the property calculation of mesne profits is for an amount greater than market rent where special circumstances associated with the defendant’s actual use of the property. The medieval roots of the cause of action – whereby the defendant gives up “profits” derived from his or her use of the property – are important to remember when seeking to demonstrate special circumstances.
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