MORTGAGE RELIEF

Ashburton Guardian, Volume 51, Issue 134, 19 March 1931, Page 2

MORTGAGE RELIEF

PROVISIONS OF THE BILL. POWERS OF THE SUPREME COURT (Abridged from Press Association.) AVELLINGTON, March 18. Tlie Mortgagors Relief BiU was intro duced in the House to-day by GovernorGeneral’s message. The measure states in the preamble that on account of the special economic) conditions it is desirable tto confer jurisdiction toi postpone the exercise of powers of sale under existing mortgages in certain cases. The Act will operate on the issue of a proclamation and cease in tine same manner. The term mortgage is widely defined to cover any security for payment of money or performance of any contract granted over land or chattels or any interest therein, and includes any instrument of security granted over any policy for securing a fife insurance endowment or annuity, and also includes any agreement for sale and purchase of land. Mortgagor will include any person who lias guaranteed the performance of any covenant. The Act will not apply to loans granted under the Repatriation Act, 1918, mortgages executed after the passing of the Act, and any other class of mortgage exempted by Order-i 11-Council, All tho provisions of the Act are to apply to the Crown. Method of Relief. The Bill jnwides that a. mortgagee before attempting to exercise power of sale, recession or entry into possession shall give notice in writing to the mortgagor, who is entitled within one month to make application to the Supreme Court for relief, this preventing any action meanwhile by the mortgagee. In his application the mortgagor shall set forth specific grounds for relief, and the application must lie made to the Supreme Court by motion supported by affidavit, and lie disposed of by the Judge in chambers. • There shall be no appeal from any order under the Act and the Court in granting relief shall take into consideration—• (a) The efl'ect of the continuance of the mortgage upon the security thereby afl'orded to the mortgagee. (b) Tiie inability of the mortgagor to redeem the property either from liis own moneys or by borrowing at a reasonable rate of interest. (c) The conduct of the mortgagor in respect of any breaches by him of the \ covenants of the mortgage. (d) Any hardship that would be inflicted on the mortgagee by continuance of the mortgage, or upon the mortgagor by the enforcement thereof . , (e) Tire extent to which any default, by the mortgagor has been caused by any economic or financial conditions afieeting trade or industry in New Zealand. (f) AYliether any relief granted by the Court pursuant to this Act would be reasonably likely to enable the mortgagor, having regard to his circumstances and the conditions mentioned in the last preceding paragraph, to meet his liabilities under the inert- * gage within such time as the Court deems reasonable. The Court is empowered to grant relief on such terms as it thinks fit to impose, and to order that the mortgagee shall not before a date specified ■ in such order, being hot later than * 12 months after the date of the mortgagor’s application for relief, dp any act or exercise any power in respect to the security save by leave of the Supreme Court, upon application by the mortgagee, on account of a breach by the mortgagor of any terms 'and conditions which the Court has imposed. At any time before the original order expires the mortgagor may apply for a further extension,' not exceeding 12 months, when the Court may grant it, making such variations of the original order as it thinks fit. Leases Affected'. The Act will apply to leases containing a purchasing clause, and for this purpose every such lease will he dealt with as if the lessee had already notified his exercise of the option to purchase under the optional -purchasing s clause, and as if the lessor were mortgagee and the lessee were mortgagor of the land, and as if the rent reserved ■by the lease were interest and the agreed purchase money were principa l moneys secured. The term of the lease shall, if necessery, be extended to give effect to this provision. General power is given the/Suprenie Court to determine matters arising out of the Act and make orders not inconsistent with the statute, notwithstanding that express provision in respect of. such matter is not contained therein. Where principal moneys under mortgage do not. exceed £SOO jurisdiction is given Magistrates to determine applications and no appeal to the Supreme Court will be permitted.

DISCUSSION IN TH£ HOUSE. / AA’ELUNGTON, March 18. After, the Prime Minister’s explanation of the Bill, Air Savage (Lalb., Auckland AA’est) said that as the measure stood it would make the position worse. It would have the effect of causing immediate foreclosures on the passing of the Act. It- would simply stimulate the calling up of mortgages before the proclamation was issued. AA’liat was wanted was sonic provision to protect mortgagors in the meantime. Colonel McDonald (U., Wairarapa) supported this view. He instanced a case in which proceedings in the direction of foreclosure were imminent. Air Martin (Lab., Raglan) suggested that the measure should be Retrospective to the beginning of this year. The Prime Minister had proposed, that legislation in respect to Hawke s Bay mortgagors should be retrospective, and Air ATartin considered that this benefit might bo applied to the whole Dominion. Air Chapman (Lab., AVellington North) endorsed this opinion. Air Poison (Did., Stratford) said he hoped the Bill would go no further than postponing interest and in some cases principal, otherwise farmers would bo faced with the practical impossibility of borrowing money on rural security. Air Forbes, replying;, said he would see that the point raised by Air .Savage and others was covered! in the Bill, in the meantime he could state that any attempt by mortgagees to get ahead of the Act would not 'be successful. The quesotih whether the provision should be retrospective would bo considered. The Bill was read a first time.