High Court: Judgment mortgage registered against debtor did not affect interest of joint tenant
The registration of a judgment against a debtor’s interest in lands did not affect the interest of his father who was a joint tenant, the High Court has ruled.
After judgment against the debtor was registered, the father and son severed their joint tenancy and transferred to the lands to themselves as tenants in common, allowing the father to bequeath his interest in the land to his grandchildren.
Stating that there was “nothing whatsoever wrong” with the father seeking to put his interest beyond the reach of the mortgagee, Mr Justice Senan Allen said the judgment was now attached to the son’s undivided moiety and should be satisfied out of that interest.
Since 1992, Mr James Bergin and his father, Mr Kieran Bergin, were registered as joint tenants of lands in Kilkenny.
In 2010, plaintiff ADM Londis plc (now ADM Mersey plc) marked judgment against James and his wife, Nicola Bergin, for €604,029.06 and €315.98 for costs. The plaintiff then registered judgment against the interest of James Bergin in the aforementioned lands.
In 2013, Kieran, who was 87, amended his will, bequeathing his interest in the land to his grandchildren, Ciaran and Eimear Bergin. Shortly thereafter, James and Kieran executed a form of transfer which recited their desire to sever their joint tenancy and transferred the lands to themselves as tenants in common in equal shares.
In July 2015, the plaintiff applied for a declaration that the judgment mortgage stood well-charged on the interest of James and Nicola Bergin in the land, and for orders under Sections 31 and 117 of the Land and Conveyancing Law Reform Act 2009 for partition of the lands or for a sale and distribution of the proceeds. Surprisingly, Kieran Bergin was not named as a defendant.
In 2016, the High Court granted a declaration that the judgment mortgage was to be well charged on James’ interest in the lands. The claim for the other reliefs was adjourned.
In August 2018, Kieran Bergin died.
In March 2019, when the case came back into the list, the plaintiff argued that, regardless of the fact that the land was registered to Kieran and James as tenants in common, the effect of survivorship was that James was solely entitled to the lands and all that was needed was an order for sale.
Thereafter, Eimear and Ciaran Bergin were granted letters of administration in Kieran’s estate for the purpose of defending the proceedings. They applied to be joined as defendants, however, the plaintiff objected and they were joined as notice parties.
Novel question of law
In the within judgment, Mr Justice Allen said a novel question of law was raised regarding the Land and Conveyancing Law Reform Act 2009 and the effect of the registration of a judgement mortgage against the interest of a joint tenant of land where one of the joint tenants is a judgment debtor but the other is not.
The plaintiff submitted that it made no difference whether or not they could sever their joint tenancy, that if the “severance of a joint tenancy after registration of a judgment mortgage against the interest of one of the joint tenants is not wholly ineffective against the judgment mortgagee… it is effective to confer on the judgment mortgagee security over the interest of each of the tenants in common after severance”.
Firstly, Mr Justice Allen rejected the proposition that, as against the world, the joint tenants “each” owned the entire of the lands – it was more correct to say that the joint tenants both own the entire of the lands.
Secondly, Mr Justice Allen said that it did not follow from severance that each joint tenant owned a defined fraction of the common property. Mr Justice Allen said it was correct to say that the tenants are “entitled to an undivided moiety, but that together they both own the whole”. In this regard, Mr Justice Allen referred to Wylie, Irish Land Law (5th edition), which states:
“In the case of both a joint tenancy and a tenancy in common, the land held by the persons concerned is held by them concurrently, so that as far as third parties are concerned the co-owners of the land must be treated a single unit for the purpose of certain transactions in respect of the land”.
Thirdly, Mr Justice Allen rejected the plaintiff’s argument that, since “a co-owner owns the whole of the property before severance and only half after, it necessarily follows that the act of severance is an alienation by each to the other of an equal undivided moiety”. Mr Justice Allen said the plaintiff failed to recognise the difference between the point of view of everyone else (i.e. the first proposition, above), and the point of view of the co-owners (i.e. this third proposition). Mr Justice Allen said that the effect of severance is that each of the co-owners will have a different interest in the land, but that it did not follow “that each or either obtained anything at all, still less his entire interest in the land, from the other. After as well as before the severance, the co-owners will hold their interest from the original grant”.
Mr Justice Allen rejected the plaintiff’s argument that the registration of a judgment mortgage capture the whole of the property held on a joint tenancy – he said that all it can capture is the judgment debtor’s interest in the property.
The intention of the transaction in 2013 was to put the interest of Kieran Bergin beyond the reach of the plaintiff, and Mr Justice Allen said he could “see nothing whatsoever wrong with that”. He added that before and after the transaction, the interest of James Bergin was subject to the judgment mortgage in favour of the plaintiff, but the interest of Kieran Bergin was not – nothing passed from James to Kieran to which the judgment mortgage might have been attached.
Stating that there was no impediment in law or in equity to James and Kieran Bergin “agreeing that thenceforth they would own the lands as tenants in common rather than as joint tenants”, Mr Justice Allen found that, by the deed executed in May 2013, they severed their joint tenancy by mutual agreement.
Mr Justice Allen made an order joining Eimear and Ciaran Bergin, as legal personal representatives of Kieran Bergin, as defendants.
He concluded that:
- The judgment mortgage registered in 2010 against the James’ interest in the lands did not affect the interest of the joint tenant, Kieran;
- The judgment mortgage did not attach to the lands, but only to James’ interest in the lands which was an undivided share as joint tenant with Kieran;
- The judgment mortgage did not sever the joint tenancy but neither did it affect the right of Kieran to sever the joint tenancy, or the right of James to consent to such severance or to agree to severance;
- Since it took effect as a charge, the judgment mortgage did not affect James’ ability to deal with his interest;
- The May 2013 deed was effective to sever the joint tenancy, and the effect of this was to convert the undivided share of each joint tenant into an undivided moiety in the lands;
- The right, or prospect, or possibility, of survivorship is not a future or contingent interest in land but an incident of joint tenancy;
- The plaintiff’s judgment is now attached to James’ undivided moiety and it is to be satisfied out of that interest.
© Irish Legal News Ltd 2020