Actio Communi Dividundo and the “Clean Break” Principle

 

Written by Sasha Kadish

A client and his girlfriend bought a house together. Their relationship soured, and they reached an impasse. Each wanted to stay in the place, and neither would compromise. What must the client do as he is not obliged to remain a co-owner against his will?

If he and his girlfriend can’t agree, he may demand the division of the jointly owned property at any time and terminate the joint ownership. As a last resort, he may apply to the Court in terms of the actio communi dividundo. He must prove that:

(a) they are a co-owner of a property;

(b) they wish to terminate the co-ownership; and

(c) the parties cannot agree on the method of division of the property.

In a recent case, an unmarried couple who were involved romantically purchased a house together and co-signed on a bond.

The relationship between the parties ended. The Applicant moved out of the jointly owned property and rented a place of his own. The respondent continued to live in the jointly owned house and conduct her business, a nursery school, within the grounds of the property.

The Court has broad discretion to effect an equitable division of jointly owned property. Where a division is not practical, the Court can award the property to one joint owner because they must compensate the other joint owner for their share in the property. Where division methods seem impractical, the Court may order the property to be sold by public auction and share the proceeds among the joint owners. The Court can also appoint a receiver and liquidator to attend to the liquidation and distribution of the property.

In the abovementioned case, the respondent claimed that she would suffer significant economic and financial prejudice should she be forced to dispose of her half share in the property on which she ran her business. She stated such prejudicial circumstances as relocation costs of her business, possible rental increases, and the possibility of closing the business should she be unable to find suitable alternative accommodation. However, the Court held that this was not a defence to a claim for the termination of joint ownership. If anything, they would be circumstances for the Court to consider when determining the mode of division of the common property.

Importantly, it was held, in circumstances where the respondent cannot afford to take over the ownership of the property in its entirety, in other words, buy out the Applicant’s half share in the property, such circumstances cannot be considered relevant.

The judge held the following:

“The Respondent’s circumstances cannot serve as a tool to shackle the Applicant to the joint property in perpetuity. The romantic relationship was the glue that held the parties together. With its end, the parties ceased living together. It is that the parties ought to make a clean break with their past”.

Thus, no one can be forced to perpetually co-own a property that they wish to no longer co-own. In such circumstances, a co-owner of a property has every right to bring an application for an actio communi dividundo, where co-owners cannot settle.