An interesting decision was handed down by the Johannesburg High Court on 1 July 2022. In this case, an applicant, being one of the parties to a universal partnership, had sought to rely on the action for division of joint ownership (actio communi dividundo) to terminate the joint ownership of an immovable property (‘the property’). The applicant also sought to appoint a receiver and liquidator with specific functions to effect and arrange the termination.
The parties in this case were in a romantic relationship. They agreed to live together and to purchase a property, which they subsequently did, and the property was registered in their joint names in 2018. They were jointly registered owners in undivided shares of the property. The relationship then broke down irretrievably in 2020. The applicant residing in the property wished to terminate the joint ownership, but the respondent refused to do so. The parties were unable to amicably agree to a way of terminating the joint ownership in the property – and as a result, the applicant made application to court in order to do so.
The action for division of property is well established in South African law. Every co-owner of property may insist on a partition of the property at any time. This may be done even in the case where there is a perpetual joint ownership agreement. If owners cannot agree on the way in which the property is to be divided, then the court is empowered to make an order that appears fair and equitable. A court may, for instance, order the property to be sold and the proceeds to be divided among the co-owners according to their shares in the property.
The principles relating to the actio communi dividundo were summarised by the Supreme Court of Appeal in the matter of Robson 5 as follows:
(a) No co-owner is normally obliged to remain a co-owner against his will.
(b) This action is available to those who own specific tangible things (res corporales) in co-ownership, irrespective of whether the co-owners are partners or not, to claim division of the joint property.
(c) Hence this action may be brought by a co-owner for the division of joint property where the co-owners cannot agree to the method of division.
(d) It is for purposes of this action immaterial whether the co-owners possess the joint property jointly or neither of them possesses it or only one of them is in possession thereof.
(e) This action may also be used to claim as ancillary relief payment of praestationes personales relating to profits enjoyed or expenses incurred in connection with the joint property.
(f) A court has a wide equitable discretion in making a division of joint property. This wide equitable discretion is substantially identical to the similar discretion which a court has in respect of the mode of distribution of partnership assets among partners.
The crisp issue for determination in this case was whether a universal partnership existed and whether it had been dissolved. It also needed to be determined whether the applicant’s election to invoke the actio communi dividundo by way of motion was the correct procedure.
The court ordered in the affirmative and stated specifically that the parties’ joint ownership of the property be terminated, the property be sold, and all necessary documentation to give effect to transfer be signed.