In the recent case of A.D.M Mersey Plc – v – Bergin and Anor [2020]IEHC3, Mr Justice Allen in the High Court ruled on the effect of a Judgment Mortgage over lands held as a Joint Tenancy in circumstance where the Judgment Mortgage, is only registered in respect of one Joint Tenant and not both of them.
Ordinarily, property held by two or more parties is held either as Joint Tenants or Tenants-in-Common. In a Joint Tenancy situation, on the death of one of the parties, the remaining surviving Tenant automatically becomes entitled to the Deceased’s interest in the property and their interest in the property increases by right of survivorship. However, where property is held by parties as Tenants-in-Common, there is no right of survivorship. On the death of one of the Tenants-in-Common, the other Tenant-in-Common does not automatically become entitled to the Deceased’s interest in the property. Rather, when the Tenant-in-Common dies, his/her interest passes under his/her Will or on Intestacy.
In this case, a father and son were registered as Joint Tenants of lands. In 2010, A.D.M Mersey Plc obtained Judgment against the son and his wife and registered its Judgment against the son’s interest in the lands. In 2013, the son’s father amended his Will to leave his interest in the lands to his two grandchildren. Thereafter, the father and son severed their Joint Tenancy so that they would now hold their interest not as Joint Tenants but as Tenants-in-Common.
It was clear the father’s intention was to move the lands beyond the reach of ADM Mersey Plc, his son’s Creditors. When the father subsequently died, as per the rules governing Tenancies-in-Common, the father’s interest in the land was inherited by his two grandchildren as per his Will. ADM Mersey plc, however, argued that it was irrelevant whatever was done in respect of the lands after their Judgment Mortgage had been registered in 2010. They argued that, given what the position was when their Judgment Mortgage was registered, that the son should now own the entirety of the lands and therefore objected to the grandchildren’s interest in the lands.
Mr Justice Allen, however, stated that there was “nothing whatsoever wrong” with the father seeking to put his interest in the lands beyond the reach of A.D.M Mersey Plc. He stated that the Judgment Mortgage only attached to the son’s interest as a Tenant-in-Common and did not attach to the grandchildren’s interest. But whilst the Judgment Mortgage did not sever the Joint Tenancy, neither did it affect the right of the father to sever the Joint Tenancy.
Conclusion:
This case now clarifies that a Joint Tenancy may be severed despite the registration of a Judgment Mortgage against one of the Joint Tenants prior to such a voluntary severance.