THE MORATORIUM.

Shannon News, 10 February 1925, Page 4

THE MORATORIUM.

APPJEJAIiS TO SUPREME COURT. Saturday, January Slat was the last day for making applications for ex-* tension of mortgages under the Mortgages Final Extension Act. With the exception of those mortgagors who have applied for an extension the provisions of the moratorium have ceased to operate, and the mortgagees hy giving due notice may assert their former rights and privileges. Although applications for extension are considerably short of the number anticipated, they will no doubt amount to well over a thousand, and the Supreme Court Judges will have their hands full for a considerable time ahead.

The applications in the various centres as far as is known at present are as follows: —

Auckland 266 Hamilton 166 Gisborne .. 21 New Plymouth 200 Wanganui r 54 Masterton 17 Blenheim 8 Nelson 24 Greymouth 7 Christchurch 137 1 Timaru 10 Dunedin Palmerston North 106. Total 1035 The Wellington, Napier and other centres have still to come in, with the result that the above figures will be very much exceeded. Effect of Application. The applications will be considered in Chambers by a Judge of the Supreme Court and the onus and obligation rests with the Mortgagor to show cause why the extension should be made. In accordance with the provisions of the Act, the Judge may take into consideration (a) The effect of an extention of the mortgage upon the security afforded to the mortgagee; (b) The ability or otherwise of the mortgagor to redeem the property, either from his own money or byborrowing at a reasonable rate of interest; 1 (c) The mortgagor’s conduct in res pect of any breaches of the covenants of the mortgage; and (d) Any hardship that would be inflicted on the mortgagee by an extension of the mortgage.

In other words, if the mortgagor is able to convince the Judge that by granting an extension, the value of the security will not depreciate; that he, the mortgagor has a reasonable chance of finding the necessary money to pay the mortgagee within a given period; that the interest will be paid promptly and the property be kept in good (repair and that no undue hardship will be inflicted upon the mortgagor, he stands a fair chance of obtaining an extension of his mortgage. Such an extension may be granted for a varying duration according to circumstances and conditions, but no extension order shall extend the due date of payment beyond In larch 31, 1927.

Benefits of Extension. Though arm-chair critics in City papers continue to denounce the Mortgages Final Extension Act, those in actual touch with the farming community of the Dominion are convinced of the great benefits that have been conferred, and the hardships that have been avoided by the extension of the Moratorium. The Afor'.gages Extension Act came ; j an end at a time when both the sheep farmers and dairy farmers were at

their wits end, and when the financial resources of the country were at a very low level. S'nce thai time the position has materially altered, and an excellent season with undreamt-of prices has put hundreds of farmers on a sound footing, who a few months ago, with the termination of the moratorium, woiac certainly have had to walk off their farms. Nor have the benefits of an extension been all in favour of f ne mortgagor. Owing to the rise in value of produce and the improvement of the general financial position of the Dominion, land-values tor mortgage purposes have materially ; improved, and whereas a termination of the moratorium last year would have wiped out thousands of second and third mortgages, the holders of such securities stand a fair chance to-day of realising the whole or at least a part of such securities. .vtuny Hopeless Cases.

The above may be quoted as part of the reasons why no more applications for extension were made. At the same time, there are many mortgagors who, for various reasons have not applied to the Supreme Court. No one will ever know tlieir number, for the legislation made no provision for the taking of a census. In many instances tlieir position was no doubt so hopeless that no extension could save them, and sooner or later these men will have to go out. Others perhaps are hoping Cor some compromise with their mortgagees without going to Court. In no case, however, can any further applications for extension orders ■be made afttr January 31st, the limitation of time having been fixed statutorily as not later than that date.

Legal Costs and Judicial Opinions A serious deterrent to the making of applications may no doubt be found in the decided opinions and criticism expressed of late by one or two Supreme Court Judges, as well as the considerable legal expense attached to an application. It was made fairly clear that the Mortgages Final Extension Act is nc particular favourite with the Supreme Court Bench. Rightly or wrongly the impression gained ground among producers that the administration of the Act would be carried out according to hard and fast rules, and strict legal lines rather than take into consideration the personal element and the merits of each individual case. It is, in fact, difficult to understand

how the few Judges in addition to their already heavy duties, are to deal with these large number of applications within the next three or fourmonths, and do justice to all parties. The cost of makifig- and hearing an application for an extension order was mentioned in the House last session to be next to nothing. The Prime Minister went as far as to say that where an applicant was able to state his own ease to the Judge, there need be no expense whatsoever. It would be of interest to know how many farmers are sufficiently versed in Supreme Court proceedings to file their own application and conduct their own case. The minimum cost of each application may be set down in the vicinity of £2O to £2G, while in many cases this amount will be considerably exceeded.