MORTGAGORS’ RELIEF

Hokitika Guardian, 24 November 1932, Page 5

MORTGAGORS’ RELIEF

BILL IN HOUSE EXPLANATION BY MR COBBE. (Per Press Assentation — Copyright.)

WELLINGTON, November 23.

The restoration to mortgagors of the protection given under the Mortgagors’ Belief Act, which has been lo s t eithei iby a variation of the mortgage or by the execution of a new mortgage in replacement of the one that ,\vas within the scope of the Act, is provided in a new Government measure, the Mortgagors’ and Tenants’ Further Relief [Bill, which was read a first time in the Htfuse to-day. ‘‘This is the most important provision in the Bill,” ,said the Hon. J. G. 'Cobbe, Minister of Justice, when explaining the provisions to the House. He added that the, existing law had no application to the'' mortgages exe i d after April 17, 1961, the date of the passing of the main Act, or to the mortgages which having been executed before that date, had since been varied by the parties. Th© clause in question provided for an extension of the application of 'the Act to mortgages which, being at any time subject to the principal Act, have be e n varied either before op after the passing of the legislation now before the House, or which had, during a similar period, heon executed in replacement or in substantial replacement of mortgages that had been at any time within the application of the principal Act. If any question arose ag to whether a mortgage was eligible for relief, the Minister 'said, the matter would be de-. termined by the courts. The objective wais to protect mortgagors who, in expectation of an improvement in prices, liad foolishly agreed to a variation of their mortgage, and had executed a fresh “one in replacement. A gre-at hardship had aj’isen in some cases, and the new legislation sought to relieve those who suffered under the main Act.

The guarantor of a mortgage, he said, enjoyed the same protection as the mortgagor himself. It had been represented, however, that there were persons who, although for all practical purposes they were guarantors of mortgage debt, were not technically so, and the 'B>ll extended the protection of the former legislation to persons in that position. The idea was to help those who, with the best intention, had guaranteed returned -soldiers anfi others in order to get them on the land. Some of these people 1 had now been hit) and this measure would give them better ; protection. By the issue of an Qrder-in-Council the Governor has the power to exclude from the operation of the main Act any specified mortgages or classes of them. Under the new Bill, he will have oppress authority to revoke any such orders, instead of relying on implied authority to d 0 so.

Although under the main Act a mortgagee i>s prevented from exercising certain power s until the mortgagor had been given an opportunity of applying to the court for relief the mortgagee is not prevented, where an incorporated company is concerned, from applying to the eourt for the 'compulsory winding up of a company. Under the new Bill, the mortgagee will not be able to file a petition for a winding tip, except after notice, as in the other eases referred to. 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 proceedings are protected. The Minister pointed out it might happen that an Order was due to expire almost as soon as it was made. The purpose of the relevant clause in tthe Bill was to allow the Court to fix the duration of an order by reference to the date ,'when it, and not the application, was made. 'lt was considered that, to save repeated applications to the courts for an order restraining a mortgagee from exercising his powers, the court should have discretion to fix a period of restraint for two yeans from the date on which an order was made.

The purpose of another clause- is to allow parties, by a written agreement, to accept the decision of a 'Stipendiary Magistrate in an application which would otherwise be beyond his jurisdiction. The Minister explained that this clause was designed to save heavy travelling expenses on the parts of applicants. It affected applications where the unpaid principal exceeded £2.000, which .was the present limit of a. Stipendiary Magistrate’s jurisdiction. A similar provision is incorporated in respect of applications for relief by lessees notwithstanding that the annua' reserved rent exceeds £2lO.

The Bill also authorises the court to join a stock mortgagee in proceedings as between a mortgagor and a mortgagee of land. In any such case, the court and the Adjustment Commission are directed to consider whether ui mt the sto”'' mortgagee has shown a proper consideration of the interests of the mortgagor and of the mortgagee. The lands concerned, of course, are those, wed mainly or substantially for agricultural, pastoral Or other farming purpo&es.

Mr 'Walter Nash asked if time payments wet’o included in the provisions of the Bill.

Replying to the discussion, the Minister said that no provision is mad e for dealing with hire purchase. The Bill was read a first time,