Land Law

• Published date: 01 December 2016
• Author: TEO Keang Sood LLM (Harvard), LLM (Malaya); Advocate and Solicitor (Singapore and Malaya); Professor, Faculty of Law, National University of Singapore.
• Date: 01 December 2016
• Publication year: 2016
• Citation: (2016) 17 SAL Ann Rev 565

Co-ownership

Severance of joint tenancy

20.1 In Tien Choon Kuan v Tien Chwan Hoa,1 the plaintiff and defendant had purchased a Housing & Development Board (“HDB”) flat as joint tenants. Later, the plaintiff severed the joint tenancy to create a tenancy in common in equal shares. Subsequently, the plaintiff applied by way of originating summons (“OS”) for an order to rectify the land register to reflect the manner of holding in unequal shares based on the parties' relative contributions to the flat, namely, 94.4% to the plaintiff and 5.6% to the defendant. The application was dismissed given its potentially contentious nature and the plaintiff was ordered to convert the OS into a writ action so that the relevant evidence could be adduced in court.2

20.2 The present application for judgment in default of the defendant's appearance and defence was also dismissed by the High Court. It was not satisfied that the plaintiff's claim was properly served on the defendant. In addition, several issues raised by the plaintiff had to be ventilated at trial which the court ordered.

20.3 In directing that the plaintiff's action proceed to trial, the court made some pertinent observations on the severance of a joint tenancy. The plaintiff had argued that he made a “mistake” when he severed the joint tenancy as tenants in common in equal shares. This was rejected by the court as the law in s 53(6) of the Land Titles Act3 (“LTA”) only permitted him to sever the joint tenancy unilaterally into tenants in common in equal shares. There was, thus, no “mistake” on the plaintiff's part. To allow the plaintiff's application to reflect the manner of holding in unequal shares would unfairly vary the proprietary interest of the

defendant unilaterally, contrary to s 53(6). This must be correct as the other co-owner might not have a chance to dispute the matter.4

20.4 While s 53(7) of the LTA empowers a court to declare that the co-owners hold the property in shares proportionate to their initial contributions to the purchase price in equity, there are issues of law to be addressed, such as that pertaining to the “relevance of a resulting trust in the case of a HDB property, where social and legislative policies may contradict the use of a resulting or any trust”.5 As the court correctly pointed out, these issues cannot be dealt with in an application for default judgment.

Sale in lieu of partition

20.5 The Court of Appeal in Su Emmanuel v Emmanuel Priya Ethel Anne6 (“Su Emmanuel”) laid down several helpful guidelines on whether a court should order a sale of property in lieu of partition under s 18(2) read with para 2 of the First Schedule to the Supreme Court of Judicature Act (“SCJA”).7

20.6 The appellant and the second respondent, who were wife and husband respectively, purchased the property in question with a bank loan and the property was registered in their joint names. The appellant did not contribute towards the acquisition of the property nor service the mortgage. Later, the second respondent lost his job and started falling behind in mortgage repayments, His sister, the first respondent, was prepared to assist him on this. She purchased 49% from the second respondent's share of the property. As a result, the interest of the parties in the property as reflected in the certificate of title were 50%, 49%, and 1% in favour of the appellant, first respondent, and second respondent respectively. Clause 10 of the sale and purchase agreement between the first and second respondents, in essence, provided that the first respondent would not evict the appellant and her children from the property. Subsequently, the first respondent applied, inter alia, for an order that the property be sold, which was granted by the High Court and the appellant appealed.

20.7 After reviewing the authorities on the court's power to order a sale in lieu of partition, the Court of Appeal laid down the following helpful guidelines:8

(a) In deciding whether it is necessary or expedient for a sale to be ordered in lieu of partition, the court conducts a balancing exercise of various factors, including (i) the state of the relationship between the parties (which would be indicative of whether they are likely to be able to co-operate in the future); (ii) the state of the property; and (iii) the prospect of the relationship between the parties deteriorating if a sale was not granted such that a ‘clean-break’ would be preferable.

(b) Regard should be had to the potential prejudice that the various co-owners might face in each of the possible scenarios, namely, if a sale is granted and if it is not granted.

(c) A sale would not generally be ordered if to do so would violate a prior agreement between the co-owners concerning the manner in which the land may be disposed of.

20.8 Applying these guidelines to the facts, the court found that the appellant and the first respondent were not on speaking terms for more than a decade, making it difficult for the parties to co-operate if they remained co-owners of the property. In addition, the prejudice to the first respondent if the property was not sold would outweigh that which the appellant would suffer if the property were sold. The first respondent had expended a substantial amount of her income and savings on the property and would almost certainly be made a bankrupt if she was unable to realise any value from the property. This was because she was facing difficulties in meeting the loan repayments as she could no longer use the moneys in her CPF account. In the appellant's case, she did not stand to suffer comparable prejudice. With the sale, she would be able to realise her value in the property and look for alternative accommodation. Furthermore, she might be able to get assistance from her older two children who were working. In light of the foregoing, the first respondent was prima facie entitled to an order for sale of the property.

20.9 In regard to cl 10 of the sale and purchase agreement, the court was of the view that it was not concerned with the circumstances or manner in which the property could be disposed of. Instead, it dealt with the separate question as between the appellant and the first respondent of the occupation of the property by the appellant and her children. As the court explained: “cl 10 was drafted and inserted into the SPA, not to address any question of the sale of the Property, but rather to assuage [the appellant]'s fear that the first respondent would attempt to

evict her and her children from the property and attempt to take possession of it once the first respondent became a co-owner” [emphasis in original].9 The court had also correctly observed that if the first respondent were to be adjudged a bankrupt, cl 10, even on the basis of the appellant's interpretation, would not have prevented the official assignee from seeking an order for the sale of the property in order to meet the claims of the first respondent's creditors.10 The appellant's subjective and mistaken belief that she would be able to block any sale of the property by her insistence on holding a half-share of the property was not relevant to the exercise of the court's discretion as to whether it should grant a sale in lieu of partition. In the circumstances, the first respondent would not be acting in a manner inconsistent with her contractual obligations by seeking an order for sale.

20.10 The decision in Su Emmanuel can also be seen to highlight the point that the court will not ordinarily make an order which will effectively override or modify the terms of an agreement that has been struck between the parties. Accordingly, where a co-owner seeks an order for sale of a property in circumstances where this will be contrary to terms that the parties have already agreed on, the existence of such an agreement must at least be a weighty consideration for the court in determining whether a sale ought to be granted.

20.11 The guidelines laid down in Su Emmanuel noted above were adopted in the following two High Court cases.

20.12 In Foo Jee Boo v Foo Jee Seng,11 the court had earlier established that the plaintiff's and defendant's legal and beneficial interests in the property, which they held as tenants in common, were 44% and 56% respectively. Having regard to the facts, the court found that neither party was residing in the property. The relationship between the parties was acrimonious. Hence, it was difficult for the parties to co-operate in respect of matters concerning the property. As it was fair for the property to be sold, the court ordered so accordingly, and that, inter alia, the proceeds of sale be divided in the proportion of their respective interests of 44% and 56% in the property.

20.13 In Cheong Woon Weng v Cheong Kok Leong,12 the court had held that the oral agreement entered into between the plaintiff and the defendant provided for the latter to be the legal owner of the property but for him to hold it on trust for both parties as tenants in common in

equal shares. In ordering the property to be sold pursuant to s 18(2) of the SCJA read with para 2 of the First Schedule thereto, the court took into consideration the principles in Su Emmanuel. The court was of the view that the order for sale was in accordance with the parties' oral agreement that the property be sold a few years after its purchase to realise their investment. The defendant's refusal to abide by the parties' agreement in this respect contributed to a deterioration of their relationship, such that they could no longer co-operate with each other. In addition, there was no serious prejudice to the defendant as he could use the proceeds of the sale to purchase another property.

Leases

Right of forfeiture

20.14 Various established principles in respect of the right of forfeiture were reiterated by the High Court in Syed Ahmad Jamal Alsagoff v Harun bin Syed Hussain Aljunied.13 The plaintiffs had...