MORTGAGES EXTENSION ACT

Dominion, Volume 12, Issue 280, 22 August 1919, Page 6

MORTGAGES EXTENSION ACT

DEPUTATION TO MINISTER DEFECTS OF SLIDING-SCALE SCHEME A deputation fiom the Wellington Chamber of Commerce ami the Society of Accountants wailed on Sir Francis Bell, Attorney-6ensr.il, yesterday to make certain proposals regarding the Jlorrgeges Extension Act.

Sir. 11. Carr, president of the Chamber of Commerce, submitted to the Minister certain recommendations from tho Chamber, as follow:— "That mortgages which were overdue 011 August: 4, Itli l, be deemed to expiro immediately, and that mortgages which were entered into before August -1, 1911, and maturing between August 1, 1914, and December 31, 1515, be deemed to mature on their respective dates in 1920; January 1, 19W, and December 31, 1917, be doemed'to mature 011 their respective dates in 1921; <• ud January 1, 191S, ami August 31, 1919, be deemed to mature on their respective dates in 1922.

"That where, under mortgages or agreements for sale and purchase, repayments of principal were required to be made, the first of such payments should deemed to become payable 011 October 1, 101!), and subsequent instalments should bo deemed to bscome due at the intervals provided in tho original mortgago or agreement for sale and purchase, but dating from October 1, 1919; and "that where there arc leases of land, including an option to pure-hare, and the date of the exercising of such option lias expired,. September 30, 1!)]9, lie deemed tlia •late iiprtu which the right to exercise such option shall cxpiro." "That mortgagees have the right to charge a minimum rate of interest of 0 per cent, on any mortgages, claiming protection under the above recommendation; ;ind that mortgagees bo given tho further right (0 charge penal rate of interest where'.interest is not paid on duo date."

Sir Francis Bell said that the date or August 31 had I een fixed for the expiry uf the Act for certain reasons. The Act liar' to expire accwlinjr to i!" own text, within a. certain time nfier tin; termination of a state of war. Then the Government had newer to set.that poricd. but assuming that a state of war ended with the signing of the armistice, the Government would not hove power to extend the Act beyond August 31. But before that dale tho Government would be able to get an act through to put something in the nlace of the Mortgage Extension Act. No poison could question that the Act was in force until August 31. Before that time the Expiring Laws OontinuanP" Ao< would corns into operation and extend it for a year, and during that yoav the Government would proceed to' lenislate. In Anstraha thev adonted a scheme for a sliding scale for the time of expiry of mortgages, but the perirvl was a ve'.y short one. The list of the. mortgages under i'mt scheme would i spire in .Tune, 1920. Ilis idea in? (hnl, it was nonsense for people to say that iliey did not care to go to tile Supreme Hiurt.- Tt had been made mute cheap. His opinion was that the objections to it were mere stuff and talk- on the surface. The Mortgages Extension Act as it stood did not extend mortgages. It merely prevented mortgages from exercising certain of their powers without reference to the Court. His idea was lo extend the whole operation of the Act until December 31. 1920. Tho idea that all mortgages would all fall due on the eaine day was "all bosh." Every mortgage, or practically every mortgage, which had been in force "in 1911, had expired, and been renewed. There were a certain number of them in which the mortgagees had refused to grant an extension for a further term, but tho number was .insignificant. A pan from that the sliding scale proposal had been vcrv carefully considered by himself, and lie thought that if tliev would consider it fully they would find that it would be unjust in operation. In soma cases mortgages ought not to he extend* ed to the date fixed by the Act. He. knew of no be.lei' method than to extend the operation of the Act for -n considerable period. This would mean thai mortgages would remain current until December, ]!)20, unless tha Supreme Court gave power to call up the principal. As to tho request made that provision should be made foi tlie charging of a penal rale of interest, he had never thought- of that, and lie could not giva an answer on it at once. To fix a minimum rate of interest of six per cent, in an Act promoted by the Government would be equivalent to saying that the mercantile rate was more than six per cent. Generally speaking, it was truu that money could not now bo obtained at less than six pet cent., but it was not true that money could not be obtained for less than this rate occasionally. He 'would view with tie gravest misapprehension any proposal that the Government. should declare ilia', tho minimum rate for first-class security was six per cent., and he would not be a party to it unless lie could see that it was essential. Under tho Act as at present the filing of a fair rate of interest for each case was left to the Court. In prauticallv every case the parties agreed, because they knew always that '.here was power lo compel them if they did noti Ho wns unable to agreo that the present system had proved unsatisfactory. He might bo a little prejudiced in our of the Act, because it.had been drawn bv himself at the beginning of the war without precedent, and it had beeil copied by. every Australian Legislature and even in England. He could not agree without further consideration that tiie fixing of dates by a sliding scale was ii fair method. It miglit easily prove to bo an unfair method, unjust to some, and too easv to others. He did not wish to abandon the Supreme Court, because? he believed that the effect of the Supremo Court having power was to force tho parties to come lo equitable agreements.. In reply to a question. Sir Francis Bell said that lie thought lie could agree to the charging of a penal rate under certain circumstances. This provision was net in the present Act.