Partition and Sale Flashcards
Partition of Property Act 1996 Section 2
2 (1) All joint tenants, tenants in common, coparceners, mortgagees or other creditors who have liens on, and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act.
(2) Subsection (1) applies whether the estate is legal or equitable or equitable only.
(3) In order to achieve partition, special timber licences may be assigned to any of the interested parties.
(4) Despite subsection (3), a special timber licence must not be partitioned and any special timber licences left over after the others have been assigned, must be ordered to be sold and the proceeds distributed among the interested parties in order to achieve partition
***Also notice s2 concerns LAND. If it is personal property then the partition of property act does NOT apply (one is left with equity). After the word land is the word MAY. So there is a discretion in the court to partition or not.
There is a general discretion as to whether the property should be left in co-ownership (joint or TIC) or should it be converted to individual ownership.
Coparceners
Under s2 of the Partition of Property Act - focused on who may be compelled to partition but also focuses on category of “coparcener”. Coparceners were historically used where there was no male heir. If there was a male heir, inheritance would go to eldest son. If there were no sons, it would go to daughter BUT not the eldest daughter, would go to all the daughters as coparceners. So doesn’t really exist today but is a general generic word for a person who shares equally with others.
Partition of Property Act s4
4 (1) Any person who, if this Act had not been passed, might have maintained a proceeding for partition may maintain such a proceeding against any one or more of the interested parties without serving the other or others, and a defendant in the proceeding may not object for want of parties.
(2) The court may order inquiries as to the nature of the property, the persons interested in it and other matters it thinks necessary or proper, with a view to an order for partition or sale being made on further consideration, but all persons who, if this Act had not been passed, would have been necessary parties to the proceeding must be served with a notice of the order.
(3) Persons served with notice under subsection (2)
(a) are bound by the proceeding as if they had been originally parties to the proceeding, (b) may participate in the proceeding, and
(c) may apply to the court to amend the order..
Notes: S4 deals with the persons who may seek an order for partition. Under 4(1) → Morrow & Eakin case → partition was available only to persons who had a right to possess property. Morris&howe case → court said partition is not available between successive interests, have to be co-owners with the right to possess.
Partition of Property Act s6
Sale of property where majority requests it
6 In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, and if the party or parties interested, individually or collectively, to the extent of 1/2 or upwards in the property involved request the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property, the court must, unless it sees good reason to the contrary, order a sale of the property and may give directions.
Notes: Key section because it is focused on where the parties who are wanting a return or a conversion into individual ownership have at least half of the interest. In court instead of going first to s2, they will go directly to s6. In Howells view, they should technically go to s2 first to decide whether there is ground to order partition or sale and then go to s6 that having exercised discretion under s2 that the property will be converted to individual ownership and then the question is whether they will order a division of the property or order a sale. Where half or more request a sale instead of a division, the court must unless it has reason to the contrary order a sale. Often court goes right to s6 when half or more request a sale.
S6 is partition or sale
S2 is directed at co-ownership or individual ownership.
Partition of Property Act s7
Sale in place of partition
7 In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, and if it appears to the court that because of the nature of the property involved, or of the number of parties interested or presumptively interested in it, or of the absence or disability of some of those parties, or of any other circumstance, a sale of the property and a distribution of the proceeds would be more beneficial for the interested parties than a division of the property, the court may
(a) on the request of any of the interested parties and despite the dissent or disability of any other interested party, order a sale of the property, and
(b) give direction
Partition of Property Act s8
Purchase of share of person applying for sale
8 (1) In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, then if any party interested in the property involved requests the court to order a sale of the property and a distribution of the proceeds instead of a division of the property, the court may order a sale of the property and give directions.
(2) The court may not make an order under subsection (1) if the other parties interested in the property, or some of them, undertake to purchase the share of a party requesting a sale.
(3) If an undertaking is given, the court may order a valuation of the share of the party requesting a sale in the manner the court thinks fit, and may give directions.
Do we need to abide by principles of equity in partition?
We should be aware of 2 approaches taken:
One is Rayner v Rayner
court says when exercising discretion we are exercising equitable discretion and as such we need to be aware of all of the principles of equity that relate to the discretion by court of equity. Court wrote into this that a person seeking equity must do equity, have clean hands, act in good faith, be free of malice spite and vexatiousness. Must be worked into the discretion under the partition of property act.
Other is Hammerling v Hammerling (case within one of these cases)
Court said when we look at partition of property act, we dont have to bring within the exercise of our discretion, the principles of equity into play. Because we are exercising a statutorily give discretion not necessarily as a court of equity.
Statute simply states that we have a discretion and may be compelled to partition.
we simply apply the statute without seeking principles of equity as a limitation on how we exercise discretion. Also, when dealing with property the party has a prima facie right to get their money separated from the other co-owners. When dealing with property right, questions of malice or motive are not directly relevant. THey can be taken into account but are not required to be. Court also said that the discretion we have as one that we exercise in the face of prima facie is discretion unless such discretion should not be made? (para 29)
Maybe some principles of equity are relevant to particular cases but not relevant as a general jurisdictional limitation of the exercise of discretion, because it is a statutory discretion, and a prima facie will go ahead unless an order that such order will not be made.
See Bradwell v Scott → Now clear that we do NOT have to use equitable principles in the exercise of discretion.
Statute only covers land, so now you are back in equity. Is your jurisdiction exclusively an equitable jurisdiction with all of the principles of equity? Strong argument that YES.
On other hand could argue and say that equity, in exercising its discretion, would reflect the same principles that govern under the statute in a parallel area. This may well be the interpretation that is followed.
Morrow v Eakin and Eakin (1953, BCSC)
Ratio: Only those with right of possession may seek partition (e.g. not creditors, remainderman, etc)
→ reform recommendation was to allow creditor to seek partition directly (rather than by acquiring someone’s share)
Rayner v Rayner (1956, BCSC)
A court may exercise its equitable discretion (concerning fairness) in the awarding or refusing partitions and sales. In this case a Maxim of Equity applied: “he who comes to equity must have clean hands” so for equity, there must be no unworthy malice, spite, or vindictive behaviour. Court saw the husband’s conduct in this case as poor.
Comment: but we are dealing with property rights, and so perhaps motive should not be relevant, as demonstrated in the percolating water case Bradford v. Pickles
Ratio: Court discretion: may focus on equitable “clean hands” maxim or on statutory discretion
Bradwell v Scott (2000, BCCA)
Legislation says partition when asked by one over ½ interest “unless it sees good reason to the contrary” →
lack of good faith, vexatiousness or maliciousness or prove that an order for sale would cause serious hardship to stop the order for partition can be helpful but are not the test. Not the exclusive measure of good reason.
Ratio: Assesses whether equitable principles are relevant to partition discretion (no). Says serious hardship test is not a test.
Schellan case (2011)
island case/ court denies request to order sale. Sees “good reason not to” - similar to expropriation.
