Charge given Priority to Judgment Mortgage
A charge may sometimes rank in priority to a prior judgment mortgage, i.e., where the charge was made pursuant to a loan agreement, and the loan moneys paid, prior to the date of the judgment.
See Industrial Credit Corporation PLC -v- M. J. Gleeson & Co. Ltd. and the Governor and Company of the Bank of Ireland (High Court, O’Carroll J. 1 8.2.92 ).
Such registration is made only if a request for priority is made and proof is given and then only after notice to the party in whose favour the judgment mortgage was registered and in the absence of valid objection.
The proof required is the Loan Agreement (with a certified copy for retention) and an affidavit by the party seeking the priority and in whose favour the charge is made. The affidavit must prove the loan agreement and the payment of the loan moneys on foot of it prior to the date of the registration of the judgment as a mortgage. It must also identify the person against whom the judgment was registered as a mortgage (that is the Judgment debtor) with the person who executed the loan agreement, received the loan money and executed the charge.
The priority note is entered at the foot of the charge showing its priority to the judgment mortgage and a note is entered also at the foot of the entry of the judgment mortgage showing that it ranks in priority after the charge.
(Practice Direction 2.3.6)