A SUGGESTED EXTENSION

Hokitika Guardian, 29 June 1932, Page 8

A SUGGESTED EXTENSION

POWERS OF COURT.

THE MORTGAGORS REL'EF ACT.

Wellington, June 25

Dealing with two applications under the Mortgagors Relief Act, 1931, and its amendments in respect of a Hawke-s J?av farm property, the Chief Justice i(Sir Michael Myers), iri’ a reserved judgment, said he had suggested, as another Judg e also had suggested, that the .power of the Court (should be enlarged by an amending Act to give the Court power' to bind a stock-mort-gagee by an order for what had come to b e known as a “pooling arrangements.”

The term “pooling arrangement’’ was expiaTrrTd by his Honor as being an arrangement whereby, after the stockmortgage'e had .reimbursed himself or itself- any moneys advanced for the living expenses of the mortgagor and his household and for the necessary carrying on of the operations of the farm for the year, the surplus arising from the proceeds of i:he sale of the produce of the*-fa.rm were divided rateaoiy between the mortgagee of the land and the stock-mortgagee in reduction of interest owing to them respectively, in proportion to r.he amounts owing to them respectively for principal at the commencement of the year’s operations. It had been pointed out by Mr Justice Ostler in a previous case that the Mortgagors Relief Aat did not give the Court power to bind a stock-mortgagee by an order for a “pooling arrangement.” Apart from the statement on the point by Mr Justice Ostler, the Chief Justice said he had also made :• presentations upon die matter and had -suggested, as Mr Justice- Ostler hud suggested, that the power of the Court should be enlarged by -an amending' 'Act., ‘’T recognise,” said his Honor,

“tha-; there may have been diffieu ties of which I am unaware in the way of conferring the power suggested. Be this ae it may, Parliament has not seen its may to confer the extended power.’ HAWKES BAY CASES. Continuing, his Honor said that in the present applications i;he Hawkts Bay Adjustment Commission reported that it favoured the adoption of a pooling scheme, but could not recommend such a scheme because the stock and station agency company would not agree 1:0 it. Tout - being so, the- Commission found itself forced to recommend an alternative. The alternative recommendation was that the arrears of interest ’on both mortgages should be remitted and cancelled, and that “the rate of interest for the current year ,should be reviewed at the end of the next working year.” Seeing that the Commission desired to .make • a very proper, and fair . recommendation aau found itseif -prevented from, doing so by reason of the fact that an order adopting such recommendation was | futile unless -the stock-mortgagee agreed j I it involved no reflection on' the Com- , mission when he said that an order adopting the alternative recommenda-i turn would be in his opinion an in- j equitable one which he could not see li s way to make. It would be inequit- j able, -not because of its interference j with the rights of the mortgagee— for ( -every order involved such an interfer-1 ence and every one of the judges must by this time have made many ordr-i : j under the Act in question—but because it woui'-d mean an interference with the rights of the mortgagee for the benefit of tiie company. The mortgageethe land —who might hav e no other income than that derived from the mortgage—would get nothing whutev. r, while the -stock-mortgagee would take the whol e of the proceeds of the \ of the produce of the farm first in re- j imbursement of his advances for

season’s operations, then in payment of his interest, and :th e balance' in reduc- : turn of principal. !| II OBJECT OF LEGISLATURE. | “The object of the Legislature as 1 understand it,” said his Honor, “is to { enable concessions to be given to the 'i farmer as against the mortgage,, where ’" practicable with a view to avoiding die ’! ruin of the farmer, not to make orders ~ to enable the stock-mortgagee, in effect, -I to agist his stock for nothing at the exI ppnse of the mortgagee of the land. I Such all order, as already stated? 1 j cannot see illy way to make. It would ; no doubt he possible in such caries to re-t.". in the mortgagee from exercising I h’s powers unless payment were made i on the basis of current interest (per ’ haps at a lower rate !:han that fixed bv -i the mortgage) which would he in the - nature of an occupation rent, but the I effect of .such an order would not he SO satisfactory as a pooling armngement, and might result in an injustice * -;o the stoek-morigagi-e in that the pay- : | merit of th e interest would fall up'-u l him even though the working of the ) farm for the year, resulted in a loss." I ORDER OF THE COURT.

Fli,s Honor made an order, covering both applications, which he, said he considered to bo the most equitab.o order in tlie circumstances. The terms of /the order were set out in detail. Ilis Honor'said that (lie order, if complied with; would ensure- the carrying on of the farm til! April 1. 1933, when, if necessary, the position might he reviewed, and on such review the (Joint would bo -able to consider what, if any. eonetv.siuii should lie made in rospe.-f of further aii-i-ars of interest ns »: lh--t dale, ami the term,a upon which such concessinii (if ’any) should h,, granted. “[1 have little doubt but that the

stock ancl station agency company will bo able to see iits way to give tins mnli*ri,iking required,” concluded his Honin'. "If ,i| cannot see its- way to do so, the inference is that it regards the po;ition of the mortgagor as beyond possibility or hope of recovery; and. if tliit be so, it would bo quite wrong in my opinion to prevent tli,. mortgagee from exercising Ids legaj rights.”