Debt Collection: Judgement Mortgages on Registered and Unregistered Land

The decision of Ms Justice Laffoy in the case of Mahon v Lawlor has given rise to much debate on the position on the enforceability of judgement mortgages granted against one of the joint owners of registered land in the Land Registry as against unregistered land, which is registered in the Registry of Deeds.

The case involved land held by the late Liam Lawlor TD, who held the land jointly with his wife. Judgments were obtained against Mr Lawlor and judgment mortgages registered on the lands. On his death in October 2005 under the survivorship rules Mrs Lawlor became registered as the full owner of those lands.

Proceedings had been issued by the holders of the judgment mortgages for well charging orders and orders for sale in respect of the lands. By way of preliminary matter the case came before the Court and the issue to be determined was whether the registration of a judgement mortgage (which was registered before his death) affected a severance of a joint tenancy.

It was held that it did not and as a result on the death of Mr. Lawlor the judgements mortgage died with him, leaving Mrs Lawlor the sole owner of the lands. If the registration of the judgement mortgage had severed the joint tenancy then Mrs Lawlor would then not have been entitled to the entire property by the right of the survivorship.

In her judgment Ms Justice Laffoy noted that 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. The rational behind the different treatment of registered land 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. 

As matters stand this is the position regarding a joint tenancy of registered land. There is case pending in the Supreme Court however Irwin -v- Deasy which has been brought as a matter of public interest by the Revenue Commissioners. This decision may alter the position again.

This case deals with the question of whether a judgment creditor who holds a judgment mortgage registered against the interest of one joint tenant of registered land has sufficient interest to give him locus standi to seek the partition of lands.

The 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.