The principle behind mesne profits is that a trespasser must compensate the landowner for the use of their land. Importantly the landowner does not need to have suffered any loss with mesne profits for calculated as the amount equivalent to the ordinary letting value of the property.
Following the termination or expiry of a tenancy, the liability to pay mesne profits arises when a former tenant continues to occupy the property and continues until it surrenders possession of the land.
Background
Anneli Jortikka (the Plaintiff) bought proceedings to remove her sister, Jasmins Haukka, ( the defendant) as co-executor of their mother’s estate.
The plaintiff sought mesne profits for the defendant’s alleged occupation of the property and refusal to allow it to be sold between the death of the deceased (26 August 2017) and when the defendant took possession of the property (7 December 2020) with the Court observing the
‘plaintiff is prima facie entitled to damages for the trespass calculated as the reasonable rental value of the premises during the relevant period of the trespass.’
Jortikka v Haukka [2023] VSC 20 at [56]
The defendant submitted that the financial claims should be met from the plaintiff’s share of the remaining assets of the estate.
The decision
The Court held that as the defendant occupied the property with the implied consent of the plaintiff the claim for mesne profits for the entire period the defendant occupied the property following the death of the deceased was at the very least ambiguous.
However, the position changed after the end of the negotiation period and the plaintiff’s solicitor sent the defendant a letter demanding that she vacate the property and consent to its sale on July 2 2019 (the letter).
The letter made it clear that the defendant no longer had the plaintiff’s consent to remain in the property, and should provide the estate with vacant possession the property within a reasonable time. The court held that a reasonable time is 90 days – the usual notice for tenants in Victoria where a landlord wishes to sell a rental property.
Mesne profits should be payable by the defendant from 1 September 2019, save for the period between 10 September 2020 and 30 October 2020 where by reason of the plaintiff’s Court order the defendant was permitted to occupy the property; this order was silent as to payment of rent.
The letter “expressly and emphatically” withdrew the defendant’s consent to occupy the property with the defendant liable for mesne profits for the period of trespass thereafter.
The Court held that the plaintiff’s occasional visits to secure and maintain the property when the defendant was absent did not detract from the estate’s entitlement to mesne profits for the period identified.
The Court also awarded the plaintiff commission at a comparatively generous rate of 3.5% which was considered a modest recompense for the “pains and troubles” incurred in the administration of the estate. The court accepted that as the plaintiff was entitled to half the estate and would, in practical terms, be required to fund half the commission (at [77 – 78]).
heirs & successes 