Two of the co-owners of a residential co-ownership property in Kristiansand petitioned for the compulsory dissolution of the co-ownership arrangement. The third co-owner agreed to the petition. On that basis, the District Court ordered the compulsory dissolution of the co-ownership pursuant to the simplified procedure set out in Section 15(3) of the Norwegian Co-ownership Act.
Subsequently, the two petitioning co-owners wished to withdraw the case from the District Court because the anticipated sale price had become unsatisfactory. At the same time as they requested the dismissal of the dissolution proceedings, they applied for the property to be subdivided into separate condominium units (owner sections). The District Court and the Court of Appeal held that the petitioners could not require the dissolution proceedings to be terminated.
The Supreme Court reached the opposite conclusion and held that the petitioners were entitled to withdraw their petition for compulsory dissolution. As a general rule, the costs incurred in proceedings that are discontinued for this reason must be borne by the petitioners. The Court also noted that other co-owners will ordinarily be entitled to take over and continue an initiated compulsory sale process, thereby preventing the sale from being halted.
The Supreme Court further held that an application for subdivision into condominium units pursuant to Section 9 of the Norwegian Condominium Act will, as a starting point, take precedence over a competing claim for compulsory dissolution of the co-ownership.
Accordingly, the decisions of the District Court and the Court of Appeal were set aside.
The judgment clarifies the right to withdraw proceedings seeking the compulsory dissolution of a co-ownership arrangement. It also provides guidance on how courts should deal with competing claims for compulsory dissolution and subdivision of residential co-owned properties into condominium units.
Source: Supreme Court
Atle Melø
amelo@melo.no
+47 951 80 979
