A Relationship “Riven with Conflict”: Key v Key, Occupation Rent and the Case for Mediating Estate Disputes

The High Court's recent decision in Key v Key (Property, Trusts and Probate List, Master Clark, judgment handed down 14 August 2026) provides a striking illustration of what can happen when the administration of an estate becomes inseparable from a longstanding family conflict.

Master Clark described the relationship between the deceased's two adult children as:

“riven with conflict and mistrust, with fault on both sides.”

Those words could equally describe many disputes which come to mediation following the death of a parent.

The tragedy in Key v Key is that mediation was attempted. It took place on 21 November 2024, but did not result in settlement. The litigation continued.

By the time of the hearing, Laura Key's legal costs were said to be £170,000 and Richard Key's £96,000: £266,000 between them. Meanwhile, interest on unpaid inheritance tax had risen to approximately £142,000, and was continuing at £117.81 per day.

The estate's principal property, once marketed at £2.5 million, was by June 2026 valued by the single joint expert at only £1.65 million.

Combined legal costs of £266,000 · Inheritance tax interest of approximately £142,000 · IHT interest continuing at £117.81 per day · Property marketed at £2.5 million, valued by the single joint expert at £1.65 million.

The figures make uncomfortable reading.

What was the dispute really about?

Grace Baillie Key died in September 2022 leaving her two children, Laura and Richard, as joint executors and equal beneficiaries.

Almost immediately, relations deteriorated.

There were disagreements about access to their mother's property and papers, her possessions, the funeral arrangements, repairs to the property, payment of expenses, obtaining valuations, whether the property should be sold or rented and ultimately whether either sibling could continue to act as executor.

At one stage the correspondence even included a 14-point list dealing with what should and should not happen at the property, including feeding the cat.

That detail is perhaps more revealing than it initially appears. Estate disputes are frequently about considerably more than the legal issues appearing on the claim form. Bereavement, sibling relationships, perceptions of parental favouritism and decades of family history can become attached to arguments about keys, furniture, valuations and expenses.

The result can be litigation in which the economic value of the matters actually separating the parties bears little relationship to the costs being incurred.

Fault on both sides

Master Clark did not accept a simple narrative in which one sibling was responsible for everything that had gone wrong.

Richard had initially excluded Laura from the property and access to paperwork. His insistence that the property should be rented was described as “entirely unreasonable” given the mortgagee's refusal to permit it. More seriously, he entered a caveat when there were no proper grounds for doing so, preventing a grant of probate while it remained in force.

But Laura was also criticised.

The court found that she had repeatedly refused or failed to engage sufficiently to progress an administration for which she shared responsibility. A number of serious allegations made against Richard had not been substantiated.

The judgment is particularly critical of her attempt to undermine the single joint expert's valuation because Richard had spoken briefly to the valuer during his inspection. Master Clark described this as:

“an archetypal instance of the unreasonable approach of Laura to matters relating to the estate.”

At the same time, Richard and his family had spent considerable time and money maintaining the property, towards which Laura had not contributed.

This was therefore not a case producing a straightforward winner and loser.

Removal of both executors

The central question became whether there remained any realistic prospect of the siblings working together.

The court concluded that there was not.

Master Clark held that simply determining their existing disagreements would not solve the underlying problem. Their distrust and hostility meant that further disputes would inevitably arise and return to court.

Both were therefore replaced by an independent professional administrator, Cripps Trust Corporation Limited.

That is significant when the outcome is compared with the history of the dispute.

Laura had been seeking an independent administrator since shortly after her mother's death. Richard had opposed that course because of the additional expense and maintained that the siblings could complete the administration themselves if the court resolved the points on which they disagreed.

Laura therefore succeeded on that central issue.

But there is an irony. The estimated cost of the independent administration was approximately £26,000–£34,000 plus VAT. Against legal costs already totalling £266,000, the expense which the parties had been fighting about begins to look rather different.

Did either party really win?

The result was decidedly mixed.

• Laura obtained the independent professional administrator she had sought;
• neither sibling remained in control of the estate administration;
• Richard nevertheless obtained potentially favourable indications concerning purchase of the property at a properly established valuation;
• an open-market sale was not necessarily required;
• occupation rent was not treated simply as an automatic liability for the full market rent;
• the benefit to the estate of Richard occupying and protecting the property could be taken into account; and
• Richard could receive credit for expenditure properly incurred for the benefit of the property.

Taken together, that list resembles the components of a negotiated settlement rather than a straightforward victory for either side.

Did either party do better than they could have done at mediation?

We cannot answer that question by comparing the judgment with the offers actually made at the November 2024 mediation.

Mediation is confidential and the parties' negotiations were not set out in the judgment. It would therefore be wrong to speculate about what either party offered or rejected.

We can, however, compare the eventual judicial outcome with the issues which were capable of settlement. By the end of the case:

• neither sibling was permitted to administer the estate;
• an independent administrator was appointed;
• the court indicated that Richard could potentially purchase the property at a properly established market valuation rather than requiring an open-market sale;
• the single joint expert valued the property at £1.65 million;
• Richard's occupation of the property was capable of being reflected financially, but not necessarily by charging him the full market rent;
• expenditure properly incurred by Richard for the benefit of the property was capable of being credited to him; and
• the parties had between them incurred at least £266,000 in legal costs while inheritance-tax interest continued to accumulate.

Every one of those matters was, in principle, capable of forming part of a negotiated settlement.

That does not mean that either party was wrong to reject whatever was offered at the mediation. We simply do not know what those offers were.

It does demonstrate something different: the eventual solution imposed by the court was not one which inherently required a trial.

A mediation could potentially have produced a package involving an independent administrator, an agreed mechanism for valuation, an opportunity for Richard to purchase the property, an accounting exercise concerning his occupation and expenditure, and machinery for completing the administration.

The advantage of mediation is precisely that all those matters can be negotiated together rather than determined as isolated legal questions.

The interesting decision on “occupation rent”

The judgment is also useful because of what Master Clark said about Richard's occupation of Ebury Lodge.

Laura complained that Richard had moved into the property without her consent and had not paid rent to the estate.

The court did not accept that the position was as simple as saying that because one beneficiary occupied an estate property, market rent automatically became payable.

Master Clark referred to Brown v Brown [2019] EWHC 138 (Ch) and the Court of Appeal's decision concerning co-owners in Ali v Khatib [2022] EWCA Civ 481.

The underlying equitable jurisdiction is broad. The objective is to do “broad justice” between the parties and determine what is fair.

Importantly, the traditional starting point is that one co-owner being in occupation while another is not does not, without more, automatically create an obligation to pay occupation rent. Historically, something such as exclusion or “ouster” of the other co-owner was required.

That makes the factual circumstances important.

Occupation can benefit an estate

There was another side to Richard's occupation which the court expressly recognised.

Ebury Lodge had previously been empty. Master Clark accepted that occupation was likely to protect the property and preserve its value and was therefore beneficial to the estate.

That did not mean Richard was necessarily entitled to live there entirely rent-free.

But equally, it meant that simply taking the expert's market rental figure and multiplying it by the period of occupation would not necessarily produce a fair answer.

The independent administrator was entitled to consider all the circumstances, including:

• the market rental value;
• the personal benefit Richard obtained from occupying the property;
• the benefit to the estate from having somebody occupying and protecting an otherwise vacant property;
• expenditure properly incurred by Richard maintaining the property; and
• expenses attributable purely to Richard's personal occupation, for which he should not receive credit.

Most interestingly, Master Clark suggested that it might not even be necessary formally to charge an “occupation rent”. An appropriate sum could instead be deducted from Richard's eventual share of the residuary estate to reflect the benefit he had received.

That is an important reminder that occupation rent is an equitable accounting exercise, not necessarily a conventional landlord-and-tenant calculation.

The question is ultimately what adjustment produces fairness between those interested in the property.

Exactly the sort of issue mediation can resolve

This also demonstrates why estate and inheritance disputes are particularly suitable for mediation.

A court has to determine legal issues according to the claims and remedies before it. A mediator can help parties construct a much wider commercial and practical settlement, dealing with matters together, for example:

• appointment of an independent administrator;
• an agreed valuation mechanism;
• one beneficiary buying out another;
• a defined period for completing a purchase;
• sale on the open market if the purchase does not proceed;
• occupation rent and accounting adjustments;
• credits for mortgage payments, repairs and maintenance;
• treatment of personal expenditure; and
• a timetable for completing the estate administration.

For example, instead of arguing whether an occupation rent is technically payable and, if so, from precisely what date, parties might agree that Richard receives credit for £X of expenditure on repairs and mortgage payments; that his occupation is valued at £Y; that an allowance of £Z is made because his occupation protected an otherwise vacant property; that the resulting balance is accounted for on distribution; that the property is independently valued; that Richard has a defined period in which to purchase his sibling's interest at that valuation; and that if he does not do so, the property is marketed for sale.

That can resolve in a day issues which might otherwise generate witness statements, expert reports, Part 8 proceedings and substantial costs.

More importantly, mediation permits discussion of the underlying family conflict. A judge can determine whether an executor should be removed. A judge cannot repair a sibling relationship or enable somebody to explain why what happened immediately after their mother's death has caused years of resentment.

Litigation tends to determine individual legal issues. Mediation can construct an overall practical solution.

The economics of conflict

There is a particularly sobering feature of Key v Key.

The estate had a draft net value in November 2024 of approximately £1.914 million before inheritance tax and interest. The siblings were its only beneficiaries.

Yet their combined legal costs had reached £266,000. Inheritance-tax interest had reached approximately £142,000 and was increasing by nearly £118 every day.

Those figures do not necessarily represent sums ultimately borne by the estate, and the judgment considered neither the final costs order nor the confidential terms discussed at mediation. Nevertheless, they demonstrate the economic consequences of an estate administration remaining unresolved for years.

There is also a declining property value in the background. Ebury Lodge was originally marketed at £2.5 million. A July 2023 Red Book valuation put it at £2 million. The court-appointed expert valued it in June 2026 at £1.65 million.

That does not establish that the litigation itself caused the reduction — property markets move and the property had failed to attract offers at the earlier asking prices. But it vividly demonstrates the commercial risk of allowing an estate's principal asset to remain unresolved while a family dispute continues.

Mediation does not always succeed

It would be too simplistic to use Key v Key to say that the parties should merely have mediated. They did. The mediation failed.

That is an important qualification for mediators themselves. Mediation is not a magic solution and parties cannot be compelled to compromise simply because settlement appears economically rational from outside the dispute.

Sometimes the emotional distance between parties is too great. Sometimes their assessment of the facts or the law is too different. Sometimes a party needs a judicial determination before matters can move forward.

But unsuccessful mediation does not demonstrate that mediation was inappropriate.

Indeed, the subsequent history of Key v Key arguably demonstrates why another attempt at settlement might have been worthwhile as the evidence developed. By June 2026 the parties had something they did not possess at the November 2024 mediation: a single joint expert's valuation of the property. The court had also crystallised the questions requiring determination.

Mediation need not be a single event. A dispute which cannot settle at one stage may become eminently capable of settlement after disclosure, valuation evidence or an interlocutory decision has narrowed the areas of disagreement.

A relationship “riven with conflict”

Perhaps the most important sentence in the judgment is therefore not a statement of law. It is Master Clark's description of the siblings' relationship as “riven with conflict and mistrust, with fault on both sides.”

That is precisely the environment in which litigation can become self-perpetuating.

Each disputed email, each instruction to an estate agent and each allegation becomes further evidence of the other person's unreasonableness. Professional costs increase. Positions harden. The dispute gradually becomes about vindicating what has happened during the litigation as much as resolving the original estate.

The court ultimately dealt with that problem pragmatically: neither sibling would control the administration. An independent professional would do so instead.

There may be cases in which that solution can only be imposed by the court.

But where the beneficiaries can reach it themselves, mediation offers something litigation cannot: the opportunity to agree not merely who is legally right about individual historic grievances, but how the estate is actually going to be administered and brought to an end.

For practitioners and mediators, Key v Key is therefore both a useful decision on executors and occupation rent and a cautionary tale.

In estate disputes, the question should not simply be, “Can my client win this issue?” It should also be: “What will be left to win if the family spends another two years fighting about it?”

This article is intended for general information only and does not constitute legal advice. The outcome of any dispute will depend upon its particular facts and circumstances.