Judgment Mortgages on Registered Land
A recent decision of Ms Justice Laffoy on 30 July 2008 in the Estate of Liam Lawlor deceased dealt with the position of judgment mortgages in respect of registered land where the land is held by two or more parties as joint tenants.
Mr and Mrs Lawlor held certain lands as joint tenants. Judgments were obtained against Mr Lawlor and judgment mortgages registered on the lands. Mr Lawlor died unexpectedly in October 2005. As the lands were registered as joint tenants Mrs Lawlor became registered as the full owner to those lands by virtue of the right of survivorship following the death of her husband.
Proceedings had been issued by the holders of the judgment mortgages for well charging orders and orders for sale in respect of the lands. Proceedings were in abeyance for some time pending the conclusion of other proceedings by another third party.
Notice to proceed in each of the proceedings was served on 19 July 2007. Mrs Lawlor responded by seeking various reliefs including dismissal of proceedings for want of prosecution. The matter then came before the Court on a preliminary issue on a point of law seeking determination of the status of the effect of registration of judgment mortgages on registered land. The issue to be determined by the Court was whether the registration of the judgment mortgages effected a severance of the joint tenancy and if so Mrs Lawlor would
then not have been entitled to the entire of the property by the right of the survivorship.
In her judgment Ms Justice Laffoy noted that it is well settled in the case of unregistered land that the registration of a judgment mortgage against the interest of one joint tenant will sever the joint tenancy. She noted that no authority had been pronounced on whether registration of a judgment mortgage against the interest of one of two or more joint tenants of registered
land severs the joint tenancy. Ms Justice Laffoy’s conclusion was that registration of a judgment mortgage against one of two or more joint tenants of registered land does not cause a severance. The rational behind this was that the registration of a judgment mortgage does not involve any transfer of interest to the judgment creditor but in effect is similar to a charge and therefore ranks as a burden on registered land. Ms Justice Laffoy’s conclusion was that Mr Lawlor’s interest in the lands ceased on his death and therefore the judgment mortgages which affected his interest also ceased.
In a previous matter of Irwin -v- Deasy a determination was sought whether a Court has jurisdiction to make an order for sale in lieu of partition where the applicant is a judgment creditor in circumstances where the judgment mortgage affects only one of two or more joint tenants of the land being registered land.
It was held that a judgment creditor who holds a judgment mortgage registered against the interest of one joint tenant owner of registered land does not have sufficient interest to give him locus standi to seek partition of lands and as a consequence that party cannot pursue a remedy of sale in lieu of partition.
This decision is on appeal to the Supreme Court. Revenue Commissioners have requested the Supreme Court to deal with the matter on the basis that the issue is one of public interest. For the moment, the decision in Mahon -v- Lawlor has not been appealed.
The practical effects of the above decisions show an inconsistency between the position of a judgment creditor who holds a judgment mortgage on registered lands as opposed to one who holds a judgment mortgage on unregistered lands. Further changes shall occur in this area on commencement of the Land and Law Reform Conveyancing Act later this year. The Act affirms the position set forth in the above decisions and confirms that a judgment
mortgage on registered lands held by one or more joint tenants will not sever the joint tenancy in those lands.
We shall have further information available on this matter upon commencement of the Land and Law Reform Conveyancing Act . For further details please do not hesitate to contact Roisin Bennett, Partner at firstname.lastname@example.org or by telephone (01) 6619500.
This information is for guidance purposes only. It does not constitute legal or professional advice. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. No liability is accepted by Reddy Charlton for any action taken in reliance on the information contained herein. Any and all information is subject to change.
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