Irish Law Reform Commission Papers and Reports

the general law and procedure relating to judgment mortgages and the

reasons for those proposals. As a preliminary matter, the

Commission recommends that the terminology 'judgment mortgage'

be retained, given that its import is well known to most practitioners.

Furthermore, the effect of the suggested reform does not radically

alter the nature of the process such that a change in terminology

requires to be considered.

B Procedure

(1) Type of Record

reform of the law relating to judgment mortgages is whether the

existing system whereby the record is kept with regard to interests in

land, by the Land Registry or Registry of Deeds (as appropriate),

should continue; or whether it should be replaced with a central

register of judgments referable to the names and addresses of

judgment debtors. The latter would have the advantage of potentially

operating to cover all existing and after-acquired interests in land

obtained by the judgment debtor, and avoiding the difficulties

associated with some of the case law with regard to identification of

the property.

pertained in British Columbia until the enactment of amending

legislation in 1981, and in England and Wales until legislative

amendment. This change appears to have been prompted by a

recurrence of situations of 'mistaken identity' - ie registration of a

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aware which did operate a 'name register' subsequently changed to a

'land register', and in the light of our view (see paragraphs 4.12 -

dealing with identification of the land can be overcome, the

Commission recommends that the register be maintained in the Land

Registry, and the Registry of Deeds, (as appropriate) with regard

primarily to the property.

of judgment mortgages be maintained in the Land Registry and

Registry of Deeds as appropriate, with regard primarily to the

property.

(2) Procedure for Applying for Judgment Mortgage

process by which the judgment mortgage is obtained by the judgment

creditor. One is for application to the court which may grant the order

maintain the status quo and to provide that a judgment creditor be

automatically entitled to choose to enforce an unsatisfied judgment by

way of judgment mortgage. It should be borne in mind that the

judgment mortgage is essentially a method of enforcing a judgment

against a judgment debtor who is unable or unwilling to satisfy a

judgment debt. In the Commission's view there should be no bar ab

initio to a judgment creditor availing of the judgment mortgage

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process. We believe the proper function for judicial discretion is with

regard to disposal of the property - particularly where the property is

a family home (see Chapter 5 below).

should provide that a judgment creditor be automatically entitled to

choose to enforce an unsatisfied judgment by way of judgment

mortgage.

reached any view on whether the system for enforcement of

judgments by way of judgment mortgage should be delegated to an

office with the power to impose charges unilaterally. This raises

questions as to the compatibility of such powers with the Constitution

and which extend beyond the reform of the law relating to judgment

mortgages. Furthermore, such considerations seem more appropriate

in the context of a general review of the law relating to enforcement

of judgments.

amount of costs and/or interest decreed. It is sufficient for the

judgment creditor to state whether, and, if applicable, the extent to

which costs were awarded. The precise amount of costs and interest

can be verified later by a supplemental form or affidavit (if the matter

has reached the stage of application to sell the property thereby

requiring court sanction).

amount of costs and/or interest decreed need not be stated but can be

verified later by a supplemental form or affidavit.

(3) Issues as to Identification

be affected by the judgment mortgage, the guiding principle here is

that the judgment mortgagee should be required to identify with

reasonable precision whom the judgment debtor is and the lands to be

affected.

be straightforward and the judgment creditor should be entitled to

refer to the information in any pleadings or affidavits in the

proceedings. Any innocent error should be capable of rectification

and should not affect the validity of the judgment mortgage.

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innocent error as regards identification of the judgment debtor should

be capable of rectification and should not affect the validity of the

judgment mortgage.

unregistered land needs to be equated. No amendment is required

with regard to registered land. Section 71 of the Registration of Title

Act 1964 appears to operate well and so the position should continue

that the judgment creditor should refer to the county and folio

number. As regards unregistered land, it should be provided that the

land should be identified with reasonable precision. Any innocent

error, misdescription or absence of detail should be capable of

rectification and should not affect the inherent validity of the

judgment mortgage.

unregistered land should be identified with reasonable precision and

that any innocent error, misdescription or absence of detail should be

capable of rectification and should not affect the inherent validity of

the judgment mortgage.

(4) Availability of Pre-judgment Relief

law in this area include provision for pre-judgment relief, as appears

to be available in New Zealand and British Columbia. In our opinion,

a plaintiff who has a genuine case that a defendant might wilfully

dispose of property in order to become 'judgment proof' already has

adequate remedies in the form of Mareva relief.

(5) Modernisation of Mode of Application

preference is for a form to be promulgated by Rules of Court, subject

to adaptation as the situation requires, setting out the necessary

particulars, including the parties to the action, and details of the

property to be subject to the judgment mortgage sufficient to identify

it. Procedures should also be adopted for the High Court, the Circuit

Court and the District Court to issue 'certificates of judgment', setting

out on a pro forma basis the money judgment or decree. The form of

application should have the status of a statutory declaration.

recommends should be enjoyed by the family home, a judgment

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creditor should be asked to indicate whether, to the best of the

deponent's knowledge or belief, the property is a residential

with the certificate of judgment, with the Land Registry or the

Registry of Deeds (as appropriate).

for registration of the judgment mortgage notwithstanding that the

judgment debtor has obtained a stay on the execution of the judgment

by order of the court. In the Commission's view this should apply

irrespective of the reason for which the stay is granted (eg to give the

judgment debtor time to pay, or to enable the judgment debtor to

bring an appeal).

C Effect of Registration

the judgment debtor over the property specified in the form. It should

be provided that the charge shall be deemed to have been granted for

valuable consideration (save for the purposes of the Family Home

Protection Act 1976 - see Chapter 5 below). It should be provided

that the charge has priority over the following:

(a) all later registered judgment mortgages;

(b) all later encumbrances whether registered or not.

or equitable interests, whether registered or not. In this regard the

Commission considers that the law should be left unchanged.

should bind all subsequent purchasers for value and volunteers.

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notice to all subsequent encumbrancers, purchasers and volunteers.

D Renewal of Judgment Mortgage

The 1850 Act imposes no requirement that a judgment mortgage be

renewed periodically and the Commission sees no convincing

argument for introducing such a provision in any new legislation.

E Enforcement

have all the rights of a chargee who has provided consideration.

Whilst this, in theory, could include a power of sale under the

Conveyancing Acts, in practical terms, it is difficult to envisage how

to provide for enforcement of sale without a hearing to declare the

should have all the rights of a chargee who has provided

consideration but that, given the practical difficulties of providing for

enforcement of sale without a hearing to declare the property well

charged with the judgment mortgage, the existing system whereby the

judgment mortgagee proceeds by way of mortgage suit should

continue.

appropriate to draw a distinction between situations where the

property is a family home, and situations where it is not. It seems to

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the Commission that there is merit in providing that, save where the

property is a family home, the court should only grant relief to a party

objecting to a sale pursuant to a judgment mortgage where it is shown

that the sale would result in a clear and substantial prejudice to that

party. In many instances, a judgment mortgage enforcing a sale of the

property will to all practical intents and purposes be acting for the

benefit of prior encumbrancers. This is because they will have a prior

interest in the proceeds of sale and it is very likely that the judgment

mortgage will be last in the line of secured creditors.

the mere fact that a contract of mortgage or loan is terminated before

its due date should not be a sufficient reason on its own for refusing

to order a sale. The position we have in mind here is that it should

not be open to a bank or other financial institution to object to an

order for sale sought by a judgment creditor merely because to grant

the order will mean that its loan or mortgage contract with the

judgment debtor will be terminated early (thereby depriving the bank

or other financial institution of resultant profits).

F Discharge and Satisfaction

makes provision for noting on the entries relating to a judgment

mortgage in the Registry of Deeds a memorandum of satisfaction of

the judgment mortgage. The section further provides that satisfaction

of the judgment mortgage shall be stated in every official search

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satisfaction appended to the affidavit of judgment. Pursuant to

section 5 of the 1858 Act the registration of the judgment mortgage is

deemed to be null and void. Without any further deed or conveyance

the legal or other interest or estate in the lands affected by the

mortgage automatically revests in the debtor. In other words, the

entry of the memorandum of satisfaction has the same effect as

particular legal issues arising from the process by which judgment

mortgages are discharged. Accordingly, the Commission

recommends that the current procedures be preserved with any

necessary modifications consequent upon the updated forms and

procedures recommended.

G Miscellaneous

individual, should, subject to section 284(2) of the Companies Act

1963, and section 51 of the Bankruptcy Act 1988, enjoy the same

priority as if the judgment mortgage were a validly created charge for

valuable consideration.

judgment creditor of priority in a liquidation if the judgment creditor

has not seized the land or appointed a receiver) should be repealed.

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so that there is a duty on a judgment creditor to register a judgment

mortgage in the same manner as a charge under section 99 of the

Companies Act 1963. Failure to register the judgment mortgage

should render the judgment mortgage void as against any liquidator

or other creditor of the company.

judgment mortgage over the proceeds of sale of an equitable interest,

as well as the equitable interest itself.

procedure should take into account prospective changes to be effected

pursuant to the introduction of electronic conveyancing.

should not inhibit the ability of the plaintiff to register immediately a

judgment mortgage save where the court makes an explicit order

restraining such registration.

creditor who has effected a sale holds the proceeds for the account of

any prior incumbrancers.