THE MORATORIUM

Dominion, Volume 14, Issue 310, 24 September 1921, Page 7

THE MORATORIUM

AMENDING BILL INTRODUCED LIMITS OF THE EXTENSION ; PROVISIONS FOR REPAYMENTS The Mortgages and Deposits Extension- BUI, introduced yesterday by Vice-Regal Message, is to supersede the Mortgages Extension Act, 1919, and the Mortgages Extension Amendment Act, 1921, with the exception of clause 4 of the last-named. It confers power upon, the Governor-Genera! in Council to make regulations "for giving full effect to the provisions of this Act and for the due administration thereof.” The same exceptions from the application of fhe provisions are made as in the Act of last year, viz., trade mortgagee .and securities for loans granted under the Repatriation Act. 1918. with the addition of mortgages executed after October 24, 1919. the date on which the Mortgages Extension- Act of that year came into force.

In addition to mortgages, other instruments affecting land are brought within the scope of the measure, these including agreements for the sale nnd purchase of land if entered into before October 24, 1919, and leases of land containing an optional or compulsory purchasing clause granted before that date. Tho agreements for sale and purchase are to be regarded under the new measure as mortgages of tho land to secure the unpaid nortion (,f the purchase money, while the purchasing danse 'in a lease is to be treated ns if tho rent were the interest on a mortgage, and tho purchase price were money secured by a mortgage. Exception to this portion is made in the rase of an agreement for sale and nnrehnso under the Workers Dwelling Act. 191(1, and agreements for the sale and purchase of n. leasehold interest unless freehold land is included with the leasehold in the agreement;

TAifh these executions »nd saving clauses, it is provided that no mortgageo R h a n have the power to call un or demand tho ■payment of fhe principal sum or any part of it before -Tun» SO. 1922; to exercise any newer of sale orentry info nosse«sion conferred eifhn- bv the mortgage or ha- statute: or wffhout +ha leave of a .Tndgs of the Sunremo C’eiirf fn- commence iiw notion (nr hr-ach of ony covenant, condition or nr*rn«menf expressed or implied in the mortgage.

APPLiCATIONS FOR EXTENSION. ..Where the principal sum secured bv a Mortgage is already due or falls due before June 30, 1925, the mortgagor is given the. option, at any time before March 31, 1922. of making application for an. extension. The method of procedure proyTrled in this case differs from that in anyof the previous measures of fhe kind. The-mortgagor is required before the date mentioned to send a notice to the Public. Trustee making formal application for the extension, being requited to ■pay . fees rising from a minimum of ten shillings to greater sums according to fhe amount of his debt under the mortgage. . By making this application, the mortgagor is ckemed to offer to pay in.forest, nt the rate of 64 per cert, on the , sum .secured., unless he is already, paying a rate in-excess of that. ..TT'* is also deemed to have.- nndrrtak-»n to observe all■ the •conditions of tho original instrument except tho r”nayr-.or<* 01-inro for the further term. Tn’ «rldition, he undertakes to make renaymor*- fiy instalments as-laid down in the Bill. The wrnr.t of l-ho extension maker tlmso conditions obligatory unon the mortgager, and' gives the mortgagee the right to enforce firm against the mortgagor or anv iruerantor of his. ■ The Public Trustee, on r-’ceiving a ye. quest for extension, is ren”ired to not’fv the mortgagor or his aftornev in. .the event of his absence from th-*. Dominion Tf the mortgagor cannot be found, and has no attorney or authorise-i acent. the notice is’to be sent to n Public Trust Office solicitor, who watch»s the interests of the mortgagor, and in the discretion of the Public Trustee, may, on his Tielnlf; oppose the application for extension. , The. mortgagee is given one calendar month ‘in which to lodge an objection to th n anplication of the mortgagor. If • he fails to do so. the term of the instrument is automatically extended to June GO 19 I> s. on the conditions that interest is’to be paid at least nt the rate of 61 per cent, per annum. That is to say. if the rate set out in the mortgage is less than that, it becomes increased to that rate. The mortgagor is also required to commence ' repayment by instalments from January 1. 1923—5 per cent, of the sum owing for that year, and 10 per cent, of the principal sum in each year thereafter, in half-yearly instalments.

LAND BOARDS TO ADJUDICATE. If the mortgagee lodges an objection to the instalment, accompanied by the fees prescribed, the Public Trustee must notify the mortgagor of ,that fact and send to the Land -Bor rd of the. district in which the land is situated copies of the mortgagor’s application and of the objection. The Land Board then appoints a time, hears the parties, and decides upon the rights of the caseThree members of the board are sumcient for a quorum, and at the hearing the board is not to bo 'round by the rules' of evidence, but may hear then case and decide as it thinks lit, accepting, if necessary, written statements in place of oral evidence. The board may take into consideration (a) the effect of the continuance of the mortgage upon the security afforded to the mortgagee; (b) the inability of the mortgagor, to redeem the property either from his own money or by borrowing at a reasonable rate of interest; (c) the conduct of the mortgagor in respect of any breaches by him of the covenants of the mortgage; (d) any hardship that would be inflicted on tho mortgagee by the continuance of the mortgage, or upon the mortgagor by the extension of it; and (e) any other relevant circumstances. The hoard mar, disallow the objection, or grant it entirely, in which case the mortgagee- will be able to exercise his powers in full after June 80, 1922, or may allow the objection in part, appointing a date earlier than June IM), 1925, as the date, of the extension, and requiring the repayment of instalments larger than those provided in the Bill. The decision of the hoard is to be final and conclusive, not being subject to appeal to oi- review by.any Court. The determination of the board is to be notified to the Public Trustee, upon whom devolves the duty of having registered against the title of the land a memorandum setting forth the decision, or the extension if no objection has been made. If. in addition to land, chattels form part, of the security in a mortgage, the extension in the ease of the laud simultaneously applies t’z the chattels, anil is to ha registered in the chattels transfer register. Where the . security is over chattels alone, objections to extension of tho term are to be considered ami determined by. the Public Trustee, or any officer of the Public Trust. Office to whom he may delegate the duly, in the same manner as laid down .for land hoards in the case of mortgages over land. By a further provision of the Bill, every mortgagee may, by action alter June 30, 1922, enforce any covenant or condition, expressed or implied in his mortgage or in the Bill other than a. covenant for the repayjnent of ths pein-,

cipnl sum. The power of entry and cals is not to .'be enforced before 1905 unless the mortgagor has failed to apply I ? r all sion, or having applied, ha* foiled to obtain ,it. or unless the mortgagee lins obtained leave from the °Supreme Court. The Court is given discretion to grant leave br summons in Chambers. rf it decides that the conduct of the mortgagor or the ■. condition or management of or’ dealing with the mortgaged property has been such as to render it just and equitable that the restrictions imposed upon the powers of the mortgagee by this part of the Act or any of the restrictions should be removed the provisions of this part of the Act shall apply to the Crown. MONEY ON DEPOSIT. With regard to.the case of money held on contract of deposit, either for a fixed term or at call, where the BUnl 01 aggregate sums due by any one borrower to anv one lender does not exceed *lOOO. Iha-due date of the contract or contracts is extended to December 31. 1922. Where- the sum or aggregate of sums due from one borrower to one lende- exceeds .IJKIfIO the dun date I.’ extended to Juno. 30. 1923. 'rhe conditions on which this relief is given to Ihe borrower are: —(a) The borrower is Io pay interest on the sum owing at lhe rate of fit ner cent.; fb) unless the lender has notified in writing to the borrower Hint he doos not desire repayment bv instalments, lh» borrower shall renay I•> (he lender instalments of the principal sum in the following manner: Where the total -nm owed do*s nol exceed TRIM, 10 tier cent, in each of Jamimy. Auril, .Ttilv. and Oelober, 1922, and I lie balance of (Ml nor cent, on December ”1 1929. Where th-' total sum owed is J„‘ ,>f .eiOfM) 71 per rent, is Io be repaid in each omvlcr of 1922 as in the -..-evious eq°e, a similar proportion in Januarv and April. 19?'. ->ml It. Wai»ee of 55 ne** cent, on tune 31), 1923. So p,„„. ns the lior-ower observes the conditions laid down. llm lender cannot sue for the reeoverv of lhe money. The Bill com-lmb-s wifi, •• general saving clause staling Unit “.-Ml picceedim.'« pending al Um commencement of this Act under anv enactment hereby repealed may be continue I and completed »« if this Act had not been passed, and P ]| leave heretofore granted bv the Supreme Court nndor any such enactment zor hereafter- granted by the Sunrenm Cou'-I in a.nv such pending proceeding* cb.nll endi*'-** for the nurnoses z-.f (his Act ns if granted there; lli'der.”

'Pile section -1 of lhe 19-?| Amendment l<:|-, which remains in force. refers to the powers ■ cnnfcrr'-il the Supreme Court In- lhe War Legislation Act. 1217. tn suspend nr vary contracts affected by the war. this tower having been tcconferred by iji4 k<rt> of this year.