En Bloc Sale of Multi-Storey Building under the Partition Ordinance: Connaught Real Estate Ltd v Dawns Light International Ltd [2026] HKCFI 3315

In Connaught Real Estate Ltd v Dawns Light International Ltd [2026] HKCFI 3315, the High Court ordered the en bloc sale of the 23-storey Shiu Fung Hong Building (“the Building”) pursuant to the Partition Ordinance (Cap. 352) (“PO”), bringing an end to a protracted co-ownership dispute.

The Building was co-owned through corporate vehicles representing different descendant branches of the late Fung family. Over successive generations, the co-ownership arrangement has become unsustainable and is no longer beneficial to all persons interested. The deterioration of family relationships, coupled with the loss of trust and confidence, have rendered continued co-ownership impracticable. The Building is further not managed to its fullest potential or value.

For more than a decade, the Plaintiff had secured offers to acquire the Building and attempted a consensual means of disengagement. These efforts were met with silence or inaction from the Defendants, further escalating mistrust and lack of accountability. In these circumstances, the Plaintiff invoked the PO and sought an order for sale.

The PO provides a statutory mechanism for unwilling co-owners to bring an end to an unwanted co-ownership.

Under s.2 of the PO, the court may order a partition of the property under s.4, or a sale of the property under s.6, or refuse to make any order.

Under s.6 of the PO, where it appears to the Court that a partition of the property would not be beneficial to all the persons interested, the Court may make an order for the sale of the property.

Reaffirming Wong Chun Kei v Poon Vai Ching [2007] 1 HKLRD 825 (at §§18-19, per Recorder Joseph Fok SC (as his Lordship then was)), the Court restated that:

1. A co-owner has a basic right to rid himself of the shackles of co-ownership and, if he has no other remedy, to ask for an order for partition or sale.
2. When it is impracticable to make an order for partition, the court should make an order for sale unless it is persuaded (the burden being on the opposing co-owner(s)) that such an order will not be beneficial to all the co-owners, or that it will result in very great hardship to one co-owner.
3. Whether an order for sale is beneficial to all the co-owners is not determined by the dissent of the opposing co-owners or the assertion by them that it is not beneficial. It has to be determined by the court objectively.

In the course of the 4-day hearing, upon hearing parties’ submissions, the Court accepted the Plaintiff’s case, including its legal submissions as follows:

1. Co-ownership of a Multi-storey Building: Ownership is structured through undivided shares, with unity of possession of the whole, and regulated by a DMC which contractually allocates exclusive possession of individual units: Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279 at 290, per Litton PJ; Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd (2008) 11 HKCFAR 403 at §19, per Li CJ; Donora Co Ltd v Tsuen Kam Centre (IO) (2024) 27 HKCFAR 166 at §§9-11, per Lam PJ.
2. Locus: The Plaintiff is a ½ tenant-in-common in certain equal undivided shares of the Building allocated to its commercial accommodation. In light of the nature of co-ownership of a multi-storey building as described above, the Plaintiff is a “person interested” within the meaning of s.3(1) of the PO, and it has the locus to make an application under the PO.
3. No Partition: The Defendants accepted that the Court cannot make an order for partition in the present case. Neither the commercial accommodation nor any individual floor or unit therein is “self-contained” under section 4(2) of the PO. Further, partition has a special meaning in law: it involves termination of co-ownership by putting an end to the unity of possession: Jovian Corporate Communications Ltd v Link Wide International Investment (Hong Kong) Ltd [2016] 2 HKLRD 1287 (CA) at §35, per Lam VP (as he then was). An arrangement under which co-owners enjoy exclusive possession of some designated units or floors is not partition: Forda Investors Ltd v UOB Finance (HK) Ltd [1979] HKLR 382 at 385-386, per Huggins JA; Jovian (supra.) at §§23-29. Thus, the alternative proposed by the opposing Defendants, namely allocating exclusive possession via a new sub-DMC, does not constitute partition in the legal sense.
4. Exercise of Discretion: The remaining question is how the Court should exercise its discretion under the PO, in light of various factors including the nature of the Building, the relationship between the persons interested, the redevelopment value, and the absence of severe hardship to any co-owner.

The Court ordered an en bloc sale, rejecting alternatives such as selling only the commercial accommodation in one lot or on a “floor-by-floor” basis. Key reasons included:

1. Rejection of “Floor-by-Floor” Sale: A floor-by-floor sale was considered impracticable. The Court noted that drafting a sub-DMC and managing individual sales amidst an acrimonious co-owner relationship would inevitably lead to prolonged and costly litigation.
2. Maximising Redevelopment Value (RDV): After evaluating competing structural engineering and valuation evidence (involving comparison of experts and preferring one with actual experience in projects in proximity of MTR tunnels), the Court accepted that existing underground MTR tunnels would not impose insurmountable constraints on redevelopment. With that being resolved, the Court was satisfied that an en bloc sale would unlock the land’s RDV and yield the highest financial return.
3. The “Hardship” Threshold: The 2^nd Defendant, Shiu Fung Hong Limited which owned the shop portion, submitted that an order for sale of the building en bloc would cause very great hardship to it, as it would lose possession of the shop. The Court rejected this submission, clarifying that “very great hardship” under the principles in Wong Chun Kei (supra.) requires more than “mere inconvenience”. The fatal deficiency in the evidence adduced by the 2^nd Defendant was that it has never attempted to relocate its business, nor quantified the relocation costs.
4. Tenancy Restrictions: In a pragmatic move to facilitate vacant possession and attract redevelopment buyers, the Court ordered that the co-owners shall not create or renew any tenancies within the building.

This judgment illustrates how the PO provides a distinct statutory pathway to resolve co-ownership deadlocks via the sale of an entire building. It also offers valuable insights into the PO in action, clarifying the Court’s powers (s.2), who has locus to apply (s.3), and how the Court exercises its discretion in ordering a partition (s.4) or sale (s.6).

Ms Teresa Wu and Mr Jason Fee, instructed by Deacons, for the Plaintiff

The full judgment is available at:

https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=181820