Judgment of Mr Justice Finnegan delivered on the 25th day of November 2010
The hearing in the High Court proceeded on the basis of an agreed statement of facts as follows:-
Statement of facts
“1. The above application relates to two portions of land, one comprised in Folio 573F and the other comprised in Folio 47924F of the Register County Dublin. Liam Lawlor and Hazel Lawlor were registered as owners of the lands on the 14th November 1977 and the 13th August 1982 respectively. Both portions of land adjoin each other, the premises Somerton House, being the family home of the late Liam Lawlor and Hazel Lawlor, is comprised in Folio 47924F.
2. Both folios are subject to a number of burdens, but the burdens relevant to this application are a series of judgment mortgages relating to orders for costs obtained by the plaintiff which were registered as judgment mortgages in respect of both folios. The judgment mortgages were so registered between July 2002 and March 2004.
3. The late Liam Lawlor and Hazel Lawlor were registered as owners of the lands as joint tenants. In his affidavit sworn on the 14th October 2002 the late Liam Lawlor made reference to a deed of gift dated the 9th May 1997 which purported to be an assurance of his interest in the premises comprised in the folios to Hazel Lawlor. Hazel Lawlor was at all times unaware of this deed, the original is missing and was never delivered to Hazel Lawlor, and the parties accept that the same was ineffective.
4. Proceedings were commenced by Dermot Coyne by way of special summons in 2003 (Record No. 2003/259Sp). By order of Mr Justice Kearns given on the 24th November 2004 the sum of €273,669.26 was declared well charged on the lands. The said order related to a judgment obtained by Dermot Coyne against the late Liam Lawlor on the 10th February 2003. The judgment mortgage was registered as burdens No. 12 and 13 respectively on the said folios on the 5th March 2003. The said order provided that in default of a dispute in respect of the sum by the late Liam Lawlor that the lands would be sold. By further order dated the 19th October 2004 Mr Justice Kearns amended the previous order as therein provided.
5. The plaintiff in the current proceedings was a notice party in respect of the proceedings bought by Dermot Coyne. The present proceedings were issued by the plaintiff on the 24th March 2003 with the present defendant being substituted by order of Mr Justice Kearns made on the 12th January 2004.
6. It was accepted that while the proceedings instituted by Dermot Coyne were proceeding there was no need for the plaintiff in these proceedings to pursue the matter.
7. By Notice of Motion dated the 23rd October 2006 Dermot Coyne applied to the court for an order discharging the well charging order made by Mr Justice Kearns. At that stage the plaintiffs in these proceedings sought to take over carriage of those proceedings.
8. The late Liam Lawlor died on the 22nd October 2005. No attempt has been made to apply for a Grant of Probate in respect of his estate. No monies were paid by the late Liam Lawlor during his lifetime to the defendants (sic) in respect of the said sums. The joint tenancy had not been severed at the date of his death.
9. By Notice of Motion dated the 30th July 2007 Hazel Lawlor applied for an order dismissing the plaintiffs proceedings for want of prosecution , for inordinate delay and alternatively striking out the proceedings by reason of the absence of jurisdiction to grant the relief sought, and seeking an order directing a trial of issues on a preliminary point.
10. By order dated the 18th January 2008 Ms Justice Laffoy directed that Hazel Lawlor be joined as a co-defendant to the proceedings and directed that the issue of the notice of motion seeking determination of a point of law as a preliminary issue, namely the effect of the registration of a judgment mortgage on the said folio.
11. The matter now comes before the court for the determination of that issue.”
The appellant issued six special summonses on the 24th March 2003 each relating to one of the judgment mortgages which had been registered by the appellant against the interest of Liam Lawlor in the lands comprised in Folio 47924F and Folio 573 of the Register of Freeholders County of Dublin naming Liam Lawlor as defendant. Following the death of Liam Lawlor Noel, Lawlor administrator ad litem of the estate of Liam Lawlor and Hazel Lawlor were by orders of the court substituted as defendants. By leave of the court the second named respondent issued a motion seeking a trial of a preliminary issue determining the status or effect of the registration of the judgment mortgages and an order that the judgment mortgages are void and/or are of no effect.
The preliminary issue came on for hearing before the High Court (Laffoy J.). The second named respondent, the moving party on the preliminary issue, contended that the registration of the judgment mortgages against the interest of Mr Lawlor, who was one of two joint tenants, did not sever the joint tenancy and that on the death of Mr Lawlor, the joint tenancy not having been severed, the second named respondent became the sole owner of the lands by right of survivorship free from the judgment mortgages. For the appellant it was contended that the registration of the judgment mortgages against the interest of Mr Lawlor effected severance so that Mr Lawlor thereupon became the owner of an undivided interest subject to the judgment mortgages and that on his death that undivided interest became part of his estate and the judgment mortgages remained as an encumbrance affecting the same.
In a judgment delivered on the 30th July 2008 the High Court (Laffoy J.) dealt in detail with severance of a joint tenancy by the registration of a judgment mortgage in relation to unregistered land. In relation to registered land she considered the Registration of Title Act 1964 and the changes thereby effected in the system of registration of title and in particular considered the effect of section 4(c) of the Succession Act 1965 and section 62, section 69 and section 71 of the Registration of Title Act 1964. The first question for decision was whether registration of a judgment mortgage on registered land in which a joint tenancy exists severs the joint tenancy. The High Court held that it did not. Further it held that the registration of the judgment mortgages against Mr Lawlor’s interest as joint tenant in the lands was subject to Mrs Lawlor’s right of survivorship so that in the events which happened, that Mr Lawlor pre-deceased her without the joint tenancy having been severed, she became entitled to be registered as full owner with absolute title freed and discharged from the judgment mortgages. From the judgment and order of the High Court the appellant appeals.
Discussion
1. Does registration of a judgment mortgage against the interest of a joint tenant in registered land sever the joint tenancy.
Severance converts a joint tenancy into a tenancy in common. It occurs where a joint tenant alienates his interest inter vivos or in equity by an enforceable contract to alienate or by the subsequent acquisition of a further estate in the land. Thus if one joint tenant creates a mortgage or life interest out of his interest severance occurs: York v Stone [1709] 1 Salk. 158, Re Pollard’s Estate [1863] 32 L.J. Ch. 657 and Co. Litt. 302. The creation of a mere encumbrance such as a rent charge however does not effect severance: Co. Litt 286. A joint tenancy is also severed by partition or by homicide. See also The Law of Real Property, Megarry and Wade 4th edition pp 404-407 and Challis Real Property 3rd edition footnote at page 367.
In relation to unregistered land the Judgment Mortgage (Ireland) Act 1850 section 7 has the effect that the registration of a judgment mortgage against the share of a joint tenant involves the transfer of the judgment debtor’s interest to the judgment creditor “as if an effectual conveyance…had been made, executed and registered”. Thus registration of a judgment mortgage affidavit effects severance as it destroys one of the four unities, unity of title, and so creates a tenancy in common: McIlroy v Edgar 7 L.R. Ir. 521.
In relation to registered land it was generally considered that section 21 of the Registration of Title Act 1891 had the like effect and that registration of a judgment mortgage severed the joint tenancy: there remained some doubt about this by virtue of section 45(1) of the Act which provided for the registration of a judgment mortgage as a burden only. Section 21 provided as follows:-
“21(1)From and after the date of the registration of any land (including in the word ‘land’, tenements and incorporeal hereditaments) the registration of the affidavit required by the Act passed in the session of the thirteenth and fourteenth years of the reign of Her present Majesty, chapter 29, and the Acts amending the same (in this section referred to as the said Acts), for the purpose of registering a judgment as a mortgage upon the land shall be made in the prescribed manner, and with such entries as may be prescribed.
(2) Immediately upon such registration all such and the same consequences in all respects shall ensue, and all such and the same rights, powers and remedies in all respects shall be acquired and possessed by every or any person as would have ensued or been acquired and possessed by or by reason of the registration of such affidavit in the Registry of Deeds pursuant to the provisions of the said Acts, if this Act had not passed.”
The Registration of Title Act 1964 section 71 provides as follows:-
“71(1) The registration of the affidavit required by section 6 of the Judgment Mortgage (Ireland) Act 1850, for the purpose of registering a judgment as a mortgage shall, in the case of registered land, be made in the prescribed manner and with such entries as may be prescribed.
(2) In an affidavit registered after the commencement of this Act, the land shall be sufficiently described by reference to the number of the folio of the register and the county in which the land is situate.
(3) The affidavit shall be expressed to be made by the creditor specified in section 6 of the said Act of 1850 or by a person authorised to make it by section 3 of the Judgment Mortgage (Ireland) Act 1858.
(4) Registration of an affidavit which complies with the said sections and this section shall operate to charge the interest of the judgment debtor subject to –
(a) the burdens, if any, registered as affecting that interest;
(b) the burdens to which, though not so registered, that interest is subject by virtue of section 72 and
(c) all unregistered rights subject to which the judgment debtor held that interest at the time of the registration of the affidavit,
and the creditor shall have such rights and remedies for the enforcement of the charge as may be conferred on him by order of the court.”
Section 69(1)(i) of the Act of 1964 provides as follows:-
“69(1)There may be registered as affecting registered land any of the following burdens, namely,
(i) any judgment mortgage, recognizance, State bond, inquisition or lis pendens, whether existing before or after the first registration of the land.”
The Act of 1964 accordingly makes it clear that the registration of a judgment mortgage shall, rather than operating to transfer the interest of the registered owner to the judgment creditor, operate to charge the interest of the judgment debtor subject to the burdens, if any, registered as affecting the interest of the judgment debtor and burdens which affect registered land without registration by virtue of section 72 of the Act of 1964 and all unregistered rights subject to which the judgment debtor held his interest at the time of registration of the judgment mortgage affidavit. The judgment debt can be served out of the interest of a joint tenant who is a judgment debtor and is no different in its effect to a rent charge or other encumbrance affecting the interest of a joint tenant which would not affect the unity of title.
Section 4(c) of the Succession Act 1965 provides as follows:-
“4(c) The estate or interest of a deceased person under a joint tenancy where any tenant survived the deceased person shall be deemed to be an estate or interest ceasing on his death.”
The effect of this deeming provision is that for the purposes of the Succession Act 1965 on the death of a joint tenant the lands do not pass to his personal representative and do not form part of his estate. This, however, is a deeming provision only and does not affect the common law and it is the common law which requires a surviving joint tenant to be registered as full owner.
The effect of the provisions of the Registration of Title Act 1964 section 71(4) is that the registration of a judgment mortgage against the interest of a joint tenant does not effect severance of the joint tenancy as it operates as a charge only and not as a mortgage. It has not the effect of divesting the joint tenant of his interest.
The Act of 1964 in section 62 and in section 71(4) distinguishes between charges created by a registered owner and judgment mortgages. The relevant provisions of section 62 are as follows:-
“62(1)A registered owner of land may, subject to the provisions of this Act, charge the land with the payment of money either with or without interest, and either by way of annuity or otherwise, and the owner of the charge shall be registered as such.
(6) On registration of the owner of a charge on land for the repayment of any principal sum of money with or without interest the instrument of charge shall operate as a mortgage by deed within the meaning of the Conveyancing Acts, and the registered owner of the charge shall, for the purpose of enforcing his charge have all the rights and powers of a mortgagee under a mortgage by deed, including the power to sell the estate or interest which is subject to the charge.”
The Conveyancing Act 1881 defines mortgage at section 2(vi) as follows:-
“Mortgage includes any charge on any property for securing money or monies worth; and mortgage money means money, or monies worth, secured by a mortgage; and mortgagor includes any person from time to time deriving title under the original mortgagor or entitled to redeem a mortgage, according to his estate, interest or right, in the mortgaged property; and mortgagee includes any person from time to time deriving title under the original mortgagee: and mortgagee in possession is, for the purposes of this Act a mortgagee who, in right of the mortgage, has entered into and is in possession of the mortgaged property.”
The fact that “mortgage” in the Conveyancing Act 1881 includes a charge and that a judgment mortgage is a charge does not affect the well settled law that a charge on the interest of a joint tenant will not effect severance.
Thus to come within section 62 the charge must be created by the registered owner and a judgment mortgage not being created by the registered owner does not come within the section and accordingly will not operate as a mortgage pursuant to section 62(6) of the Act. A judgment mortgage is registerable under section 69(1)(i) of the Act. The effect of section 71 of the 1964 Act is that registration of a judgment mortgage affidavit creates a burden only: it does not operate as a mortgage by deed. The registered owner is not thereby divested of his interest and so unity of title is not affected and severance does not occur. The judgment creditors remedy is not as mortgagee but rather he has such rights and remedies for the enforcement of the charge as may be conferred on him by order of the Court.
Finally it is necessary to consider whether the order of the 24th November 2004 in the action taken by Dermot Coyne against Liam Lawlor could have effected severance. It is well settled that a binding contract for sale, as it divests the joint tenant of his equitable interest in his estate, will effect severance. However an order for sale of the interest of a joint tenant has not the effect of divesting a joint tenant of his interest: thus a judgment mortgage can be registered against the same: In Re Scanlon [1897] 1 I.R. 462. The joint tenant will only be divested of his interest giving rise to severance on a purchaser entering into an enforceable contract for sale pursuant to the order for sale.
Having regard to the foregoing I am satisfied that the respondents joint tenancy has not been severed.
2. On the death of a joint tenant of registered land whose interest is subject to a judgment mortgage does the judgment mortgage continue to affect the lands.
The distinguishing feature of a joint tenancy is the right of survivorship, jus accrescendi. The last surviving joint tenant will hold the entire land. The lands accrue to the surviving joint tenant by right of survivorship and not by descent. The right of survivorship is an incident of the title created by the original grant to the joint tenants and it is by virtue of the original grant that the survivor becomes entitled to the entire. The estate of a joint tenant ceases on death. Any charge created on his interest by the deceased joint tenant, in the absence of severance, ceases to affect the land on the death of that joint tenant and the surviving joint tenant taking by right of survivorship takes free of the charge. Thus Co. Litt. 286 deals with the matter as follows:-
“Also, if two joint tenants be seized of an estate in fee simple, and the one grants a rent charge by his deed to another out of that which belongs to him, in this case during the life of the grantor the rent charge is effectual; but after his decease the grant of the rent charge is void so as to charge the land, for he who has the land by survivorship shall hold the whole land discharged. And the cause is for that he who survives claims and has the land by survivorship and has not nor can claim anything by descent from his companion.”
Later Coke continues as follows:-
“By which etc, is implied, that so it is if one joint tenant acknowledge a recognizance or a statute or suffers a judgment in an action of debt, etc., and dies before execution had, it shall not be executed afterwards. But if execution be sued in the life of the conusor, it shall bind the survivor.”
And:-
“And where Littleton puts the case of a rent charge, it is so likewise implied, that if one joint tenant grants a common of pasture, or of turbary, or of estovers, or a corody, or such like out of his part, or a way over the land, this shall not bind the survivor: for it is a maxim in law, that jus accresendi praefertur oneribus; and there is another maxim that alienato res praefertur juri accresendi.”
And:-
“Here again Littleton shews the reason: and the cause wherefore the survivor shall not hold the land charged is, for that he claims the land from the first feoffor, and not by his companion, which is Littleton’s meaning when he says (that he claims by survivor), for the surviving feoffee may plead enfeffment to himself without any mention of his joint feoffee.”
That this was the common law is clear from Lord Abergavenny’s Case. Pasch. 5 Jacobi. The headnote reads as follows:-
“When judgment is given against one of two joint tenants for life, in an action of debt, and afterwards that one releases to the other before execution, such release shall not bar the execution of the plaintiff. But if such joint tenant had died before execution, the survivor should hold the land discharged of any execution.”
In the body of the judgment there is a reference to authorities and the judgment continues as follows:-
“And upon all the said books it was collected for good law, that if two joint tenants be in fee, and one grants a rent charge in fee, and afterwards releases to the other, in that case although to some intent, he to whom the release is made is in by the first feoffer, and no degree is made betwixt them, yet as to the grantee of the rent charge, he is under the joint tenant who released; and he who survives shall not avoid it after the death of him who released; for he who survives by acceptance of the release has deprived himself of the ways and means to avoid the charge; for jus accresendi, the right of survivorship, was the sole means to have avoided it and the right of his survivorship is utterly taken away by the release, and so the doubt in 33 H.6.5.a well resolved.”
The common law accordingly is that the right of survivorship arises from the original grant. It is an incident of the interest of each joint tenant. The interest of a joint tenant cannot survive his death. The surviving joint tenant takes not by way of descent from the deceased joint tenant but by virtue of the original grant. It follows accordingly that any burden created on the interest of a joint tenant cannot continue to affect the lands after his death. The surviving joint tenant will take free of such burden. That being so the respondent holds the lands comprised in Folios 573F of the Register County Dublin and Folio 47924F of the Register County Dublin freed and discharged from the appellants’ judgment mortgages.
The Land and Conveyancing Law Reform Act 2009
In this judgment I have stated the law prior to the commencement of the Land and Conveyancing Law Reform Act 2009 on the 1st December 2009 (except for section 132 which commenced on the 28th February 2010) which is the law applicable to the issues in this case. The Act of 2009 makes significant changes in that law. Section 30 of the Act provides as follows:-
“(1) From the commencement of this Part, any –
(a) conveyance, or contract for a conveyance, of land held in joint tenancy, or
(b) acquisition of another interest in such land,
by a joint tenant without the consent referred to in subsection (2) is void both at law and in equity unless such consent is dispensed with under section 31(2)(e).
(2) In subsection (1) “consent” means the prior consent in writing of the other joint tenant or, where there are more than one other, all the other joint tenants.
(3) From the commencement of this part, registration of a judgment mortgage against the estate or interest in land of a joint tenant does not sever the joint tenancy and if the joint tenancy remains unsevered, the judgment mortgage is extinguished upon the death of the judgment debtor.
(4) Nothing in this section affects the jurisdiction of the court to find that all the joint tenants by mutual agreement or by their conduct have severed the joint tenancy in equity.”
Accordingly the Act leaves unchanged the common law as hereinbefore stated: the registration of a judgment mortgage against the interest in registered land of a joint tenant does not sever the joint tenancy and if the joint tenancy remains unsevered, the judgment mortgage is extinguished upon the death of the judgment debtor.
Section 31 of the Act provides as follows:-
“31(1) Any person having an estate or interest in land which is co-owned whether at law or in equity may apply to the court for an order under this section.
(2) An order under this section includes:-
(a) An order for partition of the land amongst the co-owners;
(b) an order for the taking of an account of encumbrances affecting the land, if any, and the making of enquiries as to the respective priorities of any such encumbrances;
(c) an order for sale of the land and distribution of the proceeds of sale as the court directs;
(d) an order directing that accounting adjustments be made as between the co-owners;
(e) an order dispensing with the consent to severance of a joint tenancy as required by section 30 where such consent is being unreasonably withheld;
(f) such other order relating to the land as appears to the court to be just and equitable in the circumstances of the case.
(3) In dealing with an application for an order under subsection (1) the court may –
(a) make an order with or without conditions or other requirements attached to it, or
(b) dismiss the application without making any order, or
(c) combine more than one order under this section.
(4) In this section –
(a) “a person having an estate or interest in land” includes a mortgagee or other secured creditor, a judgment mortgage or a trustee.
(b) “Accounting adjustments” include –
(i) payment of an occupation rent by a co-owner who has enjoyed, or is continuing to enjoy, occupation of the land to the exclusion of any other co-owner,
(ii) compensation to be paid by a co-owner to any other co-owner who has incurred disproportionate expenditure in respect of the land (including its repair or improvement),
(iii) contributions by a co-owner to disproportionate payments made by any other co-owner in respect of the land (including payments in respect of charges, rates, rents, taxes and other outgoings payable in respect of it),
(iv) re-distribution of rents and profits received by a co-owner disproportionate to his or her interest in the land,
(v) any other adjustment necessary to achieve fairness between the co-owners.
Thus the Act confers upon a judgment creditor the right to apply for any of the orders mentioned in section 31(2). It would be of assistance to those called upon to advise judgment creditors and judgment debtors and indeed to the courts if the Act gave guidance as to the basis upon and circumstances in which the courts will exercise the discretion conferred by section 31(3). In the absence of such guidance the circumstances in which, for example, a judgment creditor will be granted or refused an order for sale must wait the development of jurisprudence on a case by case basis.
The Act in section 117 deals with the effect of registration of a judgment mortgage. It provides as follows:-
(3) The judgment is subject to any right or encumbrance affecting the judgment debtor’s land whether registered or not at the time of its registration.
(4) For the purposes of this section, a right or encumbrance does not include a claim made in an action to a judgment debtor’s estate or interest in land (including such an estate or interest which a person receives, whether in whole or in part, by an order made in the action) whether by way of claim or counterclaim in the action, unless the claim seeks an order –
(5) Section 74 applies to a voluntary conveyance of land made by the judgment debtor before the creditor registers a judgment mortgage against that land under section 116 as if the creditor were a purchaser for the purposes of section 74.”
Section 117 does not make any clearer the provisions of section 31 as to the basis upon and circumstances in which the courts should exercise the discretion conferred. For this reason it is to be regretted that the opportunity presented by the Act of clarifying fully the reliefs and remedies available to a judgment creditor for the benefit of both the judgment creditor and the judgment debtor was not availed of by the Legislature.
Disposition
I would dismiss the appeal and affirm the Order of the High Court.
