WAI MING TRADING LTD v. POON TANG FAT

HCMP 590/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 590 OF 2011

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R U L I N G

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1.  The plaintiff in this case applies under section 6 of the Partition Ordinance for an order for sale of the land known as Lot No. 129 in Demarcation District No. 96 in the New Territories. I will refer to the land as “the Property”. It is a vacant piece of rural land without any buildings erected thereon. The plaintiff is currently the owner of eleven-twelfths and the defendant the owner of one-twelfth of the Property.

2.  The defendant had agreed in around October 2005 to sell his one-twelfth interest in the Property to the plaintiff, and in reliance on that, the plaintiff had purchased the interests of the other former co-owners of the Property.  The defendant apparently then changed his mind and refused to sell his interests.

3.  After the plaintiff issued the present proceedings in April 2011 for sale of the Property, the defendant then proposed to partition the Property on his own terms, including granting a right of way over the Property to the owner of an adjacent piece of land belonging to a Tso of which the defendant is a member.  The defendant proposes either to partition the Property so that the part which he owns would be used as a right of way for the adjacent lot, or to sell his one-twelfth interest in the Property with a right of way for the adjacent lot.  The managers of the adjacent lot have confirmed in writing that they do not seek a right of way, and that they have not used any right of way over the Property.  The defendant disputes this, but neither the managers nor the beneficiaries of the Tso which is the owner of the adjacent lot are parties to these proceedings.

4.  The authorities are clear that a co-owner of property has a basic right to rid himself of the shackles of co-ownership and to ask for an order for partition or sale if he has no other remedy.  The courts would make no order for either partition or sale if the interests of all the owners would be better served by their continuing to remain as co-owners, or where the facts show that to make such an order would result in very great hardship to one co-owner (Lam Sik Shi v. Lam Sik Ying HCMP 1273/2009, 12 March 2010).

5.  Even if I should treat the defendant’s case as an application for partition of the Property under section 4 as opposed to an application for an order for sale of the Property as sought by the plaintiff, it would appear from the evidence filed that in view of the nature of the Property, it would not be practicable to make an order for partition.  According to the survey report, the total area of the Property is but 2,613.60 square feet.  It is now vacant and unoccupied, at least from the evidence.  The defendant owns one-twelfth of the interest in the Property.  The market value of the Property is only $500,000, according to the survey report.  It does not appear to me that an order for partition would be beneficial to all the co-owners, bearing in mind the likely costs and delay involved in a partition, the difficulties faced by the court in deciding how the Property should be divided or partitioned between the plaintiff and the defendant when they are in disagreement over the partition, as they are obviously now.  Nor do I see how the co-owners can be better served by continuing to remain as co-owners, in view of their disagreement.

6.  Under section 6(1)(d) of the Ordinance, in determining whether a partition of the Property would not be beneficial to all the persons interested, the court may take into consideration “any other circumstances” of the case.  The plaintiff in this case relies on the fact that the defendant had agreed in October 2005 to sell his one-twelfth interest to the plaintiff at the same price as the other co-owners would agree to.  The plaintiff says that it was in reliance on the defendant’s agreement that the plaintiff had purchased the other co-owner’s interest at the price of $45,738 per one-twelfth share, at the total consideration of $503,118.  The defendant has not filed evidence to dispute the fact of such agreement.  Counsel for the plaintiff submits that the court should take into consideration the defendant’s breach of agreement and his attempt to seek from the plaintiff a higher price for his share now, despite his earlier agreement.

7.  Having considered all the circumstances of this case, including the nature of the Property and the nature of the interests respectively held by the plaintiff and the defendant, and the agreement made between the plaintiff and the defendant in 2005, I agree that a partition is impracticable and would not be beneficial to all the co-owners.  I cannot see that the interests of the plaintiff and the defendant would be better served by their continuing to remain as co-owners of the Property.  There is no evidence of any hardship to the defendant which may result from an order for sale.

8.  I will accordingly grant the order for sale of the Property in terms of the Schedule attached to the Notice of Appointment issued on 8 December 2011.

(Discussion re costs)

9.  I will make the order for costs to be paid to the plaintiff, but I hope that the plaintiff would be reasonable in trying to agree on costs with the defendant bearing in mind his minority share and bearing in mind the difficulties which he has referred to. 

10.  The order of costs is to be taxed if not agreed.