Co-ownership – partition – application for order for sale of land under s. 6 – “very great hardship” shown
X was adjudicated bankrupt. Together with her father, Y, they held property as joint tenants. The trustees in bankruptcy applied for an order of sale of the property pursuant to s. 60 of the Bankruptcy Ordinance (Cap. 6) and s. 6 of the Partition Ordinance (Cap. 352). The property was valued at HK$2.9 million in the secondary market, and half of the net sale of proceeds would be more than enough to cover X’s bankruptcy expenses, all unsecured debts and statutory interest, which amounted to approximately HK$894,244. Y was 68 years old and the sole breadwinner of his family working part-time at a construction site. He had lived in the property for 17 years and presently resided there with his current wife, who was on a two-way permit and thus unable to work, and their 8-year-old child. Y recently underwent an angioplasty. He opposed the application.
Held, dismissing the application, that:
- In an application under s. 6 of the Partition Ordinance, where an order for partition was impracticable, an order for sale should be made unless the court was persuaded by the opposing co-owner that such order would not be beneficial to all co-owners or that it would result in very great hardship to one co-owner. Whether an order for sale was or was not beneficial to all co-owners was to be determined on the basis of all the objective facts, balancing the interests of one against the other. Hardship included pecuniary as well as practical detriment.
- Here, the property was Y’s only significant asset and had been his only place of residence for 17 years. In view of his age and unstable employment, it was certain he would not be able to obtain a mortgage to purchase alternative accommodation. Moreover, assuming he was eligible for public rental housing, he would not be allocated one until three to four years later, by which time he would be unable to work at a construction site. Objectively balancing the interests of the creditors and the interest of Y, granting an order for sale would cause very great hardship to Y and his family and the just result would be to decline to do so.
- Assuming “exceptional circumstances” had to be shown in order to resist an application under s. 6, Y’s personal and familial circumstances, including his medical condition, were circumstances that fell outside the usual “melancholy consequences of debt and improvidence” and an order for sale would still not be granted.