MORTGAGORS' RELIEF.

Auckland Star, Volume LXII, Issue 66, 19 March 1931, Page 8

MORTGAGORS' RELIEF.

PROPOSED LEGISLATION. POWER OF VARIATION. WHAT COURTS MAY ORDER. (By Telegraph.—Parliamentary Reporter.) WEHiLINGTON, Wednesday. The Mortgagors' Relief Bill was introduced in the House of Representatives to-day. The preamble states that on account of special economic conditions it is desirable to confer jurisdiction to 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 the same manner.

The term ".mortgage" is widely defined to cover any security for the payment of money or the 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 life insurance endowment or annuity, and also includes any agreement for the sale and purchase of laud. "Mortgagor" will include any person who has guaranteed the performance of any covenant. The Act will not apply to loans granted finder the Repatriation Act, 1918, mortgages executed after the passing of the Act, and any other class of mortgage exempted by Order-in-Coun-cil. All the provisions of the Act shall apply to the Crown. Method of Relief. The bill provides that a mortgagee, before attempting to exercise power of sale, rescission 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 his application must tie made to the Supreme Court by a motion supported by an affidavit, and be disposed of by the judge in chambers. Thero shall be no appeal from any order under the Act. The Court, in granting relief, shall take into consideration: — "(a) The effect of the continuance of the mortgage upon the security thereby afforded to the mortgagee. "(b) The inability of the mortgagor to redeem the property, either from his own moneys or by borrowing at a reasonable rate of interest. "(o) The condiact of the mortgagor in respect of any breaches by him of covenants of the mortgage. "(d) Any hardship that would be inflicted on the mortgagee by the continuance of the mortgage, or upon the mortgagor by the: enforcement thereof. "(e) The extent to which any default by the mortgagor- has been caused by any economic or financial conditions affecting trade or industry in New Zealand. "(f) Whether 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 mortgage within such time as the 'Court deems reasonable."

Period of Postponement. Tlio Court is empowered to grant relief on such terms as it thinks fit to impose, ancl to order that the mortgagee shall not before a date specified in such order, being not Hater than twelve months after the daite of the mortgagor's application for relief, do any act or exercise any power in respect to the security, save --by leave of the Supreme Court upon an application by the mortgagee 011 account -of a breach by the mortgagor of any terms and conditions ! which the Court lias imposed. At any time before the ortiginal order expires the mortgagor may apply for a further extension, not exceoding twelve months, when the Court may grant it, making such variations of ■tflie original order as it thinks fit. Leases .Affected. The Act will apply to a lease containing a purchasing clause, and for this purpose every such lease will be dealt with as if the lessae had already notified his exercise of Ills option to purchase under the optional purchasing clause, and as if the lessor were the mortgagee and the lessee -were the mortgagor of the land, and as :if the rent ressrved by the lease were, interest, and the agreed purchase money were the principal moneys secured. The term of the lease shall, if necessary, t>e extended to give effect to this provision. General power is given the Supreme Court to determine matters arising out of the Act and to make orders not inconsistent with tins statute, notwithstanding that an express provision in respect of such matter is not contained therein. Where' the principal moneys under a mortgage do not exceed £500, jurisdiction is given magistrates to determine application, and no appeal to the Supreme Count will bo permitted.