MORTGORS RELIEF

Hokitika Guardian, 1 March 1932, Page 8

MORTGORS RELIEF

THE ACT EXPLAINED. DUTIES AND SCOPE OF THE COMMISIONS. As numerous inquiries are being made with reference to the duties and scope of the commissions recently appointed under the Mortagagors Relief Amendment Act passed in November last, Mr J. R. Cunningham, the chairman of the Canterbury and Westland Adjustment Commission, has supplied the following statement on the subject of mortgagors relief legis'laition, which may be of interest to those seeking information:—

The principal Act was passed in April 1931, and, broadly, the legislation is on the lines of the Mortgages Extension Acts passed during and after the Avar, except that under the present legislation the mortagagor applies to the Court for relief, Avhereas under the 1 earlier Acts the mortgagee had to apply to the Court for leave to exercise his legal rights The Amendment Act extended the duration of the Act to December 31st.. 1933, but in the event of conditions improving, the Governor-General hasauthority to repeal the'Act by proclamation before that date. The Acts bind the CroAvn, and accordingly apply to Crown mortagages as well as other mortagages. Classes of Mortgage. The following classes of mortgages are within the scope of the Act: (1> Mortgages of land. (2) Mortgages of chattels, \i.e., stock, implements, etc. (3) Agreements for sale and purchase of land. (4) Crown leases 'with coin--1 pulsory purchasing clauses. (5)- Other leases with optional or compulsory purchase clauses (6) Mortgages of life ..•..vies until they have matured either by death of the assured oi by effluxsion of time. The following classes of mortgages are exempt from the operation of the Act: (1) Mortgages of intangible property, suali as company shares. (2) Mortgages for the purposes of the Repatriation Act. (3) Mortgages executed ; after April 17th, 1931. (4) Mortgage.-, executed before April 17th, 1931, of ■ which the terms and conditions have been varied by the parties since that ’ date, or are at any time hereafter so vaiied. (5) Debentures, debenture trust deeds, and other instruments' of a : like nature, with certain exceptions. The principal Act requires a mortgagee to give notice to the mortgagor before: ■ (a) Exercising any power of sale, etc., under' the mortage (exceptin cases'of abandoned property and hie onus lies on the mortgagee to prove such property has been abandoned)y or . (b) Enforcing any judgment obtained against the mortgagor Avhether by ex btffti'on or by" ’bankruptcy'-’proceeding's The notice is to be a month’s notice jn the case of land or where bankruptcy proceedings are threatened • and a seven ; days’ notice in the ease of chattels. Within the period of notice, as - the ‘ case may be, the mortgagor may apply ; to the Court'for relief, and if lie so ap- ■ plies the mortgagee cannot exercise his . rights until the Court has dealt with the matter. If,-however, no application i for relief is filed and served, -within- n month or seven 1 days as the case may 1 be, the mortgagee is free to proceed Avith the exercise of his rights.

Matters for Court. Section 7 of the principal Act sets oui the following specific matters that _the Court may take into consideration ill addition to other relevant considerations, namely: (a) The effect of the continuance of the mortgage upon the security thereby afforded to the mortgagee. (b) The inability of the mortgagor to redeem the property either from his own moneys or by borrowiing at a reasonable rate of interest, (c) The conduct of t'n e mortgagor in respect of any breaches by him off the aovenants of the mortgage, (d) Any hardship that would be inflicted on the mortagee by the continuance of t»e mortagage or upon the mortagor by the enforcement thereof. .(e) The extent to which any default by the mortgagor has been caused by any economic ui financial conditions affecting trade or industry in New Zealand Section 8 of the principal Act em powers the Court in its discretion, after considering the foregoing matters and all the circumstances of the case, to make an order prohibiting the mortgagee from exercising his rights lor .-> specified period not exceeding one year, with power to the Court to extend the order for a nirther year upon application lijv the mortgagor before the original order expires. Farm Lands. The Amendment Act extends the Court’s powers with regard to mortgages of farm lands, by enabling it to postpone for not more than two yeais the date for payment of miy prineiptu or interest moneys and also to reduce the-rate of interest and to remit an* arrears of interest due before 'the date of the order. A mortgagor who has obtained an older under Section 8 nl the principal Act, bolore t ie passing m the Amendment Act, may apply for further relief under the latter Act, at anytime before the expiry of the order. It might he mentioned that applications or relief are to lie made to the Supreme Court, where the principal moneys are over C2OOO, and either to the Supreme Court, or the Magistrate’s (Ymrt. in cases under that amount.

Adjustments Commissions. The Amendment, Act provided for the appointment of Mortgagors’ Liabilities Adjustment Commissions, each conaist-

ing of not more than three persons, for the purpose o| assisting the Court in the exercise of its jurisdiction under the Act', and generally for the purpose of: encouraging voluntary settlements between mortgagors and mortgagees. Such" Commissions have the powers of Commissions appointed under the Commissions of Inquiry Act, 1908, including the power to summon Avitnesses and take evidence on oath, but their meetings are private and publication of their meetings or decisions is prohibited. Toe Court is empoAvdered to refer any application for relief to an Adjustment Commission, and hi such case the Commission- will investigate the financial position of the mortgagor and othei persons concerned. The Commission is to consider all the matters mentioned in Section 7 of the principal Act (set out abovb) and make, a report to the Court. Avith such recommendations as it think.-, fit to make. If the Commission’s investigations result in an agreement being reached betAveen the mortgagor and the mortgagee the Court may dismiss the application for relief, or may adjourn it to enable the agreement to bo carried into effect. In addition to acting in cases referred to it by the Court, any Adjustment Commission i-s empoAvered to act as a mediator betAveen mortgagor and mortgagee, upon the application of either party, and in such cases the Commission is to endea-A r our to promote a voluntary modification of the parties'- rights and obligations. - Should the Commission fail to arrange an adjustment, an application to the Court can still be made. The proceedings, before the Commission will be in the nature of a friendly inquiry, and any mortgagor or mortgagee can appear,in person, or by his solicitor, or, by lefive of the Commission, by any other duly Authorised person. The Commission'or any one or more of its mem-bers-may inspect a mortgaged property, if such course be deemed necessary.

Sittings of Commission. The secretary of the Canterbury auu Westland Commission is an officer of the Supreme Court at- Christchurch, and ah references, .Avhether from the Courts or from parties, should be fonvnrded i' l the first instance to the secretary. Forms of reference are now in the possession of the secretary, and may l)< obtained from him. The Commission will sit at the more important centres throughout the Canterbury and Westland districts. generally at courthouses, if available. Dates for commencement of sittings. at each selected centre Avi'l he arranged by the Commission, and the secretary Avill group references received- by him, according to the most suitable places'lor l hearing, and notify the :parties of the time and place of hearing. Whenever an application for relief • is referred to the Commission by a Supreme or Magistrate’s Court, the ’party avlio has made tin. original application to the Court, oi solicitor, shall complete a form oi reference, and lodge it Avith the propei officer of the Court, for transmissioi to the Commission.

Statements of Accounts. Mortgagors, and especially farm mortgagors, will 1 greatly facilitate and expedite the work of. the Commission by producing at the hearing of then applications a balance-sheet or plain statement of their assets a«d liabilities, and also a statement of their anticipated receipts and expenditure for the year March or April, 1932, to March or April, 1933 A statement also, if available, showing the results of their farming operations in'a normal year, would assist. Where farmers are being assisted by banks or a finn of stock agents letters or other evidence from the bank or firm, stating what further assistance (if any) can be granted to the farmer should also be produced*. It is probable that certain amendments to the Act may be made at the present- session, adding to its effectiveness, and making it more adaptable to present needs.