LIM CHIEW MING v LIM CHIN ENG

Case Significance

Illustrates how the court terminates a co-proprietorship of land under sections 145 and 417 of the National Land Code, ordering a buy-out of one co-owner's share at a determined price with a fallback of an open-market sale where the co-owners cannot agree.

This High Court decision at Johor Bahru concerns the termination of a co-proprietorship of land held by two co-owners in equal shares. The applicant, who held a 50% interest in a property in Johor Bahru together with the respondent, brought an originating summons under sections 145 and 417 of the National Land Code, seeking the termination of the co-proprietorship and consequential orders for the disposal of the property. The applicant sought, in particular, that the property be sold, either immediately or within one year, at a price not less than RM1,400,000, and the court had to decide how best to bring the co-ownership to an end while doing justice between the two co-owners. Section 145 of the National Land Code addresses the rights of co-proprietors, and the court's task where co-owners cannot agree is to fashion a fair mechanism for realising or dividing their interests. The court considered whether it should direct the applicant to sell her 50% interest to the respondent at a fixed price, or order the property to be sold on the open market at a price not less than the figure contended for. Upon consideration of the affidavits and written submissions, the court ordered the termination of the co-proprietorship and directed a buy-out mechanism under which the respondent was to purchase the applicant's 50% interest for RM700,000 within six months, failing which the property was to be sold on the open market at the prevailing market value. Each party was to bear its own costs. The judgment is a useful illustration of how the court terminates a co-proprietorship under the National Land Code by ordering a buy-out at a determined price with a fallback of an open-market sale. The judgment reflects the court's practical concern to achieve a clean severance of the co-owners' interests while giving the co-owner who wishes to retain the property a fair opportunity to buy the other out at a determined value, resorting to an open-market sale only if that opportunity is not taken up, so that neither co-owner is locked indefinitely into an unwanted joint ownership.