The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, MAY 30, 1932. NEW LAW EFFECTS.

Hokitika Guardian, 30 May 1932, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, MAY 30, 1932. NEW LAW EFFECTS.

The provisions of the National Expenditure Adjustment Bid passed during the emergency session dealing with tne reductions of dividends on cumulative preference shares, and the authority for the reduction of annuities and oilier periodical payments are explained in the memorandum issued under the direction of the Minister of Finance ■ Hon. W. Downie Stewart. Section 41 of the Act deals with dividends payable, by companies to holders of their cumulative preference shares, toe statement says. Preference shares are either cumulative or noil-cumula-tive. Where they are cumulative, then, if the profits of the company in any year are not .sufficient to pay the fixed dividend on the preference shares, the deficiency must be made up out of the profits of subsequent years. Section 41 makes a- statutory reduction of 20 per cent, (with a minimum dividend of 5 per cent.) in the rate of dividend payable on existing cumulative preference shares for a period of three years, the first such year being the company’s financial year that begins in the calendar year 1932. Relief from the operation of this section can be given by the Supreme Court on application by not less than 15 per cent, of the cumulative preference shareholders effected. Section 42 of the Act empowers the Supreme Court to make orders for the equitable reduction'of'annuities or other periodical payments, including: (1) Payments under orders made under part 11 of the Family Pro- 1 tectum Act, 1908 (Testator’s Family Maintenance); (2) Payments of alimony or maintenance. in accordance with the order of any court; (3) Payment of maintenance in accordance with any deed or agreement of separation between husband and wife; (4) Periodical payments made in terms of a will or .settlement.

It was recognised by the Legislature that in many cases the ability to pay annuities or other allowances or grants might be seriously affected by the statutory reduction of rents or interest, or by the general financial position. The side-note to section 42 would seem to indicate that an order for reduction can be made only where the payments in question are derived from the proceeds of rent or interest, but this is not in accordance with the isection in the form in which it has actually been passed by the Legislature. The authority given to the Supreme Court by the section is a general authority to vary tlie terms of any will, settlement, agreement, or order (insofar as provision is made therein for the payment of any moneys as aforesaid), if it is satisfied that such terms cannot be complied with, or cannot be compi'ed with without causing undue hardship. Any person concerned as trustee, beneficiary, settlor, or otherwise, .can approach the court to have a modifying order made.