Order for sale: ‘beneficial to all the persons interested’

In Chan William Lai Yee v Chan Yau Yuen Fun Therese ([2012] HKEC 363) two luxury properties were held by the parties as tenants in common. The plaintiffs sought an order for sale. The defendant lived in one of the properties rent-free with her family. The plaintiffs were four elderly people who depended on their share of the property to support them financially. Essentially, they were not getting any benefit (either in terms of rent or possession) from the property occupied by the defendant. Section 6 of the Partition Ordinance gives the court the power to make an order for sale where partition is not practicable. In Wong Chun Kei Johnny v Poon Vai Ching ([2007] 1 HKLRD 825) Recorder Fok SC (as he then was) said:

‘When it is impracticable to make an order for partition, the court should make an order for sale unless it is persuaded (the burden being on the opposing co-owner) that such an order will not be beneficial to all the co-owners, or that it will result in very great hardship to one co-owner.’

He went on to say that whether the order is beneficial to all the co-owners is an objective question and that it might be beneficial even if some co-owners opposed the making of an order. Presumably this means that one looks at the interests of the co-owners as a body or perhaps at the interests of a hypothetical co-owner of the relevant property.

In this case, it was clear that the parties were unwilling to continue as co-owners and the primary purpose of the legislation is to allow unwilling co-owners to terminate an unwanted co-ownership (Pun Jong Sau v Poon Wing Kong). An order for sale would allow all the parties to benefit from a reasonably bouyant market. It would not cause undue hardship to the defendant (para. 22).

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