Judgment mortgages and fraudulent dispositions in Irish land law

The principle

A judgment mortgage is a mortgage created by registering a judgment for the payment of a sum of money by a judgment creditor against the lands of a judgment debtor. It converts a money judgment into security over land, so the land cannot be sold clear of the debt until the debt is discharged.

It is wholly a creature of statute: every right the judgment mortgagee has is one the Act gives. Part 11 of the Land and Conveyancing Law Reform Act 2009 has replaced the Judgment Mortgage (Ireland) Acts 1850 and 1858. It reaches judgments of the High Court and Supreme Court, and certain Circuit Court judgments, for a sum of money, costs, charges or expenses.

Registration

Under section 116(1) of the Land and Conveyancing Law Reform Act 2009 a creditor who has obtained a judgment may apply to the Property Registration Authority to register a judgment mortgage against that person's estate or interest in land, and s.116(2) directs registration in the Registry of Deeds or the Land Registry. The application rests on an affidavit sworn by the creditor and filed in the court that gave the judgment.

Two preconditions must hold: a judgment, and an estate or interest in the land belonging to the debtor. Land held only as trustee for others gives the charge nothing to attach to: Goodbody Pensioneer Trustees Ltd v Hevac Ltd [2019] IEHC 114 IE · High Court.

The effect of registration

Section 117(1) provides that registration charges the debtor's estate or interest with the judgment debt and entitles the mortgagee to apply to court under that section or under section 31, the co-ownership provision.

Two limitations define the topic. First, registration does not sever a joint tenancy: section 30(3) says so, and adds that if the joint tenancy remains unsevered the judgment mortgage is extinguished on the debtor's death. The co-owners themselves remain free to sever: A.D.M. Mersey Plc v Bergin [2020] IEHC 3 IE · High Court.

Second, the judgment creditor is a volunteer. It gives nothing for the charge, and section 117(3) makes the judgment mortgage subject to any right or incumbrance affecting the land, registered or not, at the time of registration. In Larianov Foundation v Leo Prendergast and Sons (Engineering) Ltd [2017] IEHC 192 IE · High Court a mortgage deed executed years earlier, but registered only months after the judgment mortgage, still took priority: Keane J held the debtor held the lands subject to it.

Enforcement and the discretion to order a sale

Registration alone produces no money. The creditor applies to court for a well charging order, declaring the lands properly charged, and then for relief under section 117(2): an account of other incumbrances and their priorities, an order for sale and distribution of the proceeds, or any other enforcement order the court thinks appropriate. For co-owned land, section 31(2) adds partition, accounting adjustments, and the power to dismiss the application outright.

That discretion is real. In Muintir Skibbereen Credit Union Ltd v Crowley [2015] IEHC 107; [2016] IECA 213 IE · Court of Appeal two family homes were jointly owned by the borrowers and their wives, who were never consulted about the borrowing and signed nothing charging the homes. White J refused a sale because half the net proceeds would not rehouse either family. Upholding him, Hogan J reasoned that section 31(5), preserving the court's jurisdiction under the Family Home Protection Act 1976, signals that the section 31 power must be exercised consistently with that Act, so the creditor could not prevail against innocent spouses who never consented. He added that partition of a family home in these circumstances was not a realistic possibility.

In The Provost, Fellows and Scholars of the University of Dublin, Trinity College v Kenny [2020] IESC 77 IE · Supreme Court Baker J listed the relevant factors: whether the innocent non-debtor co-owner would be made homeless; whether the proceeds would rehouse them; that a sale which will not clear the debt matters but is not determinative; whether that co-owner got value from the borrowing; their living arrangements, age and means; and any offer to reduce the liability. That application predated the 2009 Act, so the factors apply to section 31 by analogy.

Muintir Skibbereen is not authority that a family home is immune from a judgment mortgage: that character weighs in the discretion, it is not a bar.

Fraudulent dispositions: section 74

The companion problem is the debtor who puts property beyond the reach of creditors before they can register. Section 74 of the Land and Conveyancing Law Reform Act 2009 replaced the Conveyancing Act 1634, as amended by the Voluntary Conveyances Act 1893, and creates two heads of voidability.

Section 74(1) makes a voluntary disposition of land made with the intention of defrauding a subsequent purchaser voidable by that purchaser; s.74(2) adds that a later disposition for value does not of itself show that intention. Section 74(3) makes any conveyance of property made with the intention of defrauding a creditor or other person voidable by any person thereby prejudiced.

The transferee's protection is in section 74(4): subsection (3) does not apply to an interest conveyed for valuable consideration to a person in good faith without notice of the fraudulent intention. Conveyance is defined broadly by section 3, covering charges, leases, mortgages, transfers and every other assurance by instrument except a will. The two halves of the topic join at section 117(5): section 74 reaches a voluntary conveyance made before registration, the creditor being treated as a purchaser.

Proving an intention to defraud

Direct evidence of fraudulent intent is rare, and a conveyance is not fraudulent merely because it is voluntary. The leading case is In Re Moroney (1887) 21 LR Ir 27 IE · pre-1922, where Palles CB distinguished two routes. Where the grantor acts with the express object of defeating or delaying creditors, the law presumes fraud. Otherwise the intent is assumed as a matter of law if the necessary or probable result of denuding himself of the property is to defeat or delay creditors.

Keegan Quarries Ltd v McGuinness [2011] IEHC 453 IE · High Court carried those principles into section 74(3). Finlay Geoghegan J found an express intent to defeat a potential claim, and held that the court should in any event infer fraud because the act's necessary or probable consequence was to defeat, delay or hinder creditors. It also settles reach: the plaintiff was not yet a creditor when the transfer was executed, but a person from whom the transferor contemplates a claim is an "other person" under section 74(3).

Doherty v Quigley [2015] IECA 297 IE · Court of Appeal held, on the 1634 Act, that contingent creditors whose debt crystallises later may challenge the transaction. The classic badges of fraud still do evidential work: a gift of a person's whole property, secrecy, litigation pending, and the donor staying in possession.

Statutory basis

• s.116 — registration with the Property Registration Authority.
• s.117(1) — registration charges the debtor's estate or interest.
• s.117(2) — the enforcement orders, including sale.
• s.117(3) — the charge takes subject to any prior right or incumbrance, registered or not.
• s.118 — a certificate of satisfaction extinguishes it.
• s.30(3) — no severance of a joint tenancy; if it stays unsevered the charge dies with the debtor.
• s.31 — orders over co-owned land, or refusal.
• s.74 — voidable dispositions made to defraud, with the good faith purchaser exception.

Key authorities

• Larianov Foundation v Leo Prendergast and Sons (Engineering) Ltd [2017] IEHC 192 IE · High Court — the volunteer rule: an earlier, then unregistered, mortgage deed took priority over a judgment mortgage registered before it.
• Goodbody Pensioneer Trustees Ltd v Hevac Ltd [2019] IEHC 114 IE · High Court — a judgment mortgage charges only an estate or interest the debtor actually holds.
• Muintir Skibbereen Credit Union Ltd v Crowley [2015] IEHC 107; [2016] IECA 213 IE · Court of Appeal — well charging order granted, sale refused: the innocent spouses had not consented and could not be rehoused from their share.
• The Provost, Fellows and Scholars of the University of Dublin, Trinity College v Kenny [2020] IESC 77 IE · Supreme Court — the discretionary factors on an application for sale.
• In Re Moroney (1887) 21 LR Ir 27 IE · pre-1922 — fraudulent intent is either expressly proved or assumed in law from the conveyance's probable consequences.
• Keegan Quarries Ltd v McGuinness [2011] IEHC 453 IE · High Court — applies Moroney to section 74(3), and holds that a person from whom the transferor anticipates a claim is an "other person" who may be prejudiced.
• Quinns of Baltinglass Ltd v Smith [2017] IEHC 460 IE · High Court and McNamara v McCann [2016] IEHC 443 IE · High Court — the test applied to assets moved into a new company, and to a home put in a spouse's sole name.

How it is examined

The cues are specific: a money judgment, a debtor who owns land, a co-owner who signed nothing, a transfer of property shortly before or after proceedings issue, or a security executed years ago but registered late. Both halves of this topic are regularly set as standalone case notes on Irish land law papers, and a judgment mortgage over a co-owned family home is a recurring problem question.

Order of attack. Is there a judgment, and does the debtor hold an estate or interest in the land? Was the judgment mortgage registered under section 116? What does registration achieve under section 117(1), and what does it not: no severance under section 30(3), no priority under section 117(3)? Then enforcement, through a well charging order and the discretionary question of sale, worked through the Trinity College v Kenny factors with Muintir Skibbereen as the counterweight. Finally, if the debtor has disposed of property, run section 74 separately: the limb, the intention, and the good faith exception.

Related Land Law notes: Larianov Foundation v Prendergast · Muintir Skibbereen Credit Union Ltd v Crowley · Keegan Quarries Ltd v McGuinness · all free Land Law notes.