Posts Tagged ‘Order for sale’

Does the voice of the trustee in bankruptcy of one co-owner carry greater weight when considering an order for sale?

October 18, 2018

In Lo Yau Shing (a bankrupt) ([2018] HKCFI 1574) the court was asked by the trustee in bankruptcy of one co-owner of a flat to grant an order for sale. This was resisted by the other co-owner.

B (the bankrupt) and F (his father) were joint tenants of the flat in which F lived with his wife. B’s bankruptcy gave rise to a severance of the joint tenancy (Re Dennis). B’s trustee in bankruptcy applied for an order for sale under section 60 of the Bankruptcy Ordinance and section 6 of the Partition Ordinance.

In Wong Chun Kei v Poon Vai Ching it was held that the court should make an order for sale unless either: (a) the order would not be beneficial to all co-owners; or (b) the order would result in very great hardship to one co-owner. The burden of proof was on the owner resisting the sale. Hardship could be physical or practical. The voice of the trustee in bankruptcy did not carry greater weight than that of the other co-owner.

The court refused to grant the order for sale. F and his wife were both very elderly and in very poor health. If the order were made:

‘The choices faced by Lo Senior and his wife will be to rent a modest room as residence, move into a residential home for the elderly run by charities (if one can be found) or hope for a big rise in social welfare payouts from the Government, which is unlikely.’ ([93])

In these circumstances, it would be unjust to make an order for sale, balancing the interests of F against those of the creditors. Further, it would cause very great hardship to F and his wife.

If the test were whether the circumstances were exceptional (Re Bremner; Everitt v Budhram) the outcome would be the same.

Michael Lower

Advertisements

Equity follows the law: the burden of proof

November 12, 2016

In Lam Fung Ching Annie v Tse Kwok Wing Jacky ([2016] HKEC 2387, CA) the Court of Appeal rejected an application to appeal to it. L, T and T’s father held property as joint tenants. L severed the joint tenancy by notice and successfully applied for an order for sale. T sought to appeal against this finding and order. It appears to have been accepted that there was an equitable tenancy in common since it was accepted that T held her share on trust for her father. At first instance, the judge rejected T’s argument that her father was the sole beneficial owner; L was able to show that she was entitled to a one-third beneficial interest. There was some discussion as to the burden of proof. The Court of Appeal (Kwan JA giving the judgment) took the view that, following the severance, L had a one third share as a legal tenant in common. It was for T to show why the equitable position should differ from this and she had failed to do so ([22] and [23]).

Michael Lower