MORTGAGE RELIEF

Evening Post, Volume CXIV, Issue 126, 24 November 1932, Page 9

MORTGAGE RELIEF

FURTHER PROVISIONS

IMPORTANT CHANGES

BILL INTEODUGED

Restoration to mortgagors of the protection given under the Mortgagors' Belief Act, which has been lost either by the variation of the mortgage or by the execution of a new mortgage in replacement of one that was within, the scope of the Act is provided in- a -new Government- measure, the Mortgagors and Tenants Further Belief Bill, which was read a first time "in the House of Representatives- yesterday. .'>

"This is the most important provision in the Bill,"- said the Minister'of Justice (the Hon. J. G. Cobbe), when explaining the provisions to the House. He added,that the existing law had no

application to mortgages executed after 17th April, 1931, the date of the passing of the-main Act,'or to mortgages which, having been executed, before that date, had since been varied by the parties. The clause in. question provided for the extension of the application of the Act to mortgages which, being at any time subject to "the principal Act, had been varied either before or after the passing of the legislation now before the House or which had, during a similar period, been executed in replacement or substantial, replacement of mortgages that had been at any time within the application of the principal Act. If any question arose as to whether a mortgage was eligible for relief, the matter would he determined by the. Courts.

The objective was to protect. mortgagors, who, in expectation of an improvement in prices, had foolishly agreed to a variation of their mortgage and had executed a fresh one in replacement. Great hardship had arisen in some cases, and the new legislation sought to relieve those who had suffered; . - ■ ■ •'-- . ■

Under the main Act, the guarantor of a mortgage enjoyed the same protection, as the mortgagor himself. It had beeri represented, however, that there were persons who, although for all practical purposes guarantors of the mortgage debt, were not technically so,'' and the Bill extended the protection of the former legislation to persons in that position. The idea was tff help those who, with the best intentions, had guaranteed returned soldiers and others In order to get them on the land. Some of these people had now been hit, and the measure would give them better protection. .'■'■■. . EXCLUSION FROM MAIN ACT. By the issue of an Order-in-Council the Governor-General has power to exclude from the operation of the main Act any specified mortgages or classes of them. Under the new Bill he will have express authority to revoke any such orders instead of relying on the implied authority to do so. Although.un/ler the main Act a mortgagee is prevented from exercising certain powers until the mortgagor has been given an opportunity of applying to the Court for relief, the 'mortgagee is not prevented, where ah incorporated company is. concerned, from applying to the Court for the compulsory winding-up of the company. Under the new Bill, the mortgagee will not be able to file a petition for windiug up. except after notice as in the other cases referred to:- v . •'. ' '', ■:-.'■■ The Bill also authorises the Court,to extend the period for which relief may be granted under the Act. At present a relief order expires, unless renewed, twelve months after the date of the mortgagor's application. • Where the proceedings are protracted, the Minister pointed' out, it might happen that the order was due to expire almost'as soon as it was made. The purpose of the relevant clause was to allow the Court to fix the duration of the order by reference to the date when it and not the application was made. It was considered that, t to save repeated, applications to the' Courts for an order restraining the mortgagee from exercising his powers, the Court should, have the discretion to fix the 'period of restraint for two years from the date on which the order was made. • SAVING OF EXPENSE. The purpose! of another clause is to allow the parties, by written agreement, to accept the decision of a Stipendiary Magistrate in applications which would otherwise be beyond his jurisdiction. The Minister explained" that this clause was designed to save heavy travelling expenses on the part of the applicants. It affected 'applications where the unpaid principal exceeded £2000, which was the present limit of a Stipendiary Magistrate's jurisdiction. A similar provision was incorporated in respect of applications for relief by lessees notwithstanding that the annual reserved rent exceeds £210. The Bill also authorises the Court to join a stock mortgagee in proceedings as between the mortgagor and mortgagpe of the land. In any such ease the Court and the Adjustment Commission are directed to consider whether or not tho stock mortgagee has shown a proper consideration of the. interests of the mortgagor and of the mortgagee. The lands concerned, of course, are those used mainly or substantially for agricultural, pastoral, or other farming purposes. . ■ Mr. Walter Xash (Labour, Hutt) asked if time payments were included in the provisions of the Bill. Mr. W. E. Parry (Labour, Auckland Central) asked if the amendments and extensions would make the legislation any more satisfactory than it was at present, for he could assure the Minister that the present law was not giving satisfaction to the traders of Auckland. He was sure that the Minister muse have had complaints about the way the Commission was working in Auckland. He asked whether the Minister had considered appointing a' representative of ■the traders on the-Commission. . Replying to the' discussion, the Minister said, that no provision was Nmade for dealing with hire purchase.. He had had ho complaints concerning the constitution of the Auckland Adjustment Commission. , :

Mr. Parry: I have had dozens. The Bill was read a first time.