RELIEF BILL.

Press, Volume LXVIII, Issue 20498, 17 March 1932, Page 10

RELIEF BILL.

MORTGAGORS AND TENANTS. GOVERNMENT'S INTENTIONS STATEMENT BY MR FORBES. (PRESS ASSOCIATION TELEGRAM.) WELLINGTON, March 16. The Mortgagors and Tenants Relief Bill was introduced in the House of Representatives to-night by Govern :irGeneral's Message.

Speaking on the formal motion to refer the Message to the Committee of the House, Mr J. A. Lee (Lab., Grey Lynn) asked Avhether the measure was drafted similarly to the Industrial Conciliation and Arbitration Amendment Bill. Was there provision for compulsory conciliation and voluntary arbitration on tho understanding that failing agreement the mortgage should automatically lapse? He felt sure that if tho parties could get together they would be able to settle all thoir problems and remove hampering conditions. (Laughter.) He realised that all mortgagees were reasonable pooplc, .(Renewed laughter.) Mr P. Langstone (Lab., Waimarino) spoke in similar strain. He asked whether the first provision would enable tho Government by Order-in-Council to cancol all mortgages which it considered v/ero hampering industry. (Laughter.) He went on to enquire whether the Bill would impose a flat-rate reduction of interest rates, and whether it would deal with tho question of personal covenant. /

Provisions of Measure. After other Labour members had spoken, the Rfc. Hon. G. W. Forbes outlined the Bill. Ho said it extended the provisions of the Act passed last year, which had been found to work comparatively smoothly and which, had given a fair amount of relief.

Mr W. J. Jordan (Lab., Manukau): Has it been used much? Mr Forbes: Yes. There has been a fair number of cases brought beforo tho Court, and in addition settlements have been made outside the Court on terms which were felt to be reasonable, both by mortgagee and mortgagor. Continuing, Mr Forbes said his knowledge of those who had mortgages on farming lands led him to the belief that thero had been very substantial remissions made in regard to interest and mortgages generally. In Canterbury thero had been a great number of cases where it had been arranged that. the proceeds of the farm should be divided up. The farmer had been allowed a certain amount with which to carry on, and the rest had gone to the mortgagee, the stock and station agents/the banks, and anyone else interested in the farm. This course had enabled the work of farming to go on. In many cases there had been no profit coming from the farm, and tho mortgagee had had no interost at all.

Application to Securities. Tha Prime Minister said the Bill before the House would apply to securities other than those on farm lands, including Crown mortgages. Power would be given to a mortgagor to approach the Court even thoug'i the mortgagee had taken no steps against him in reference to his holding. When a mortgagor ap-v pealed to the Court his case would be referred to one of the Adjustment Commissions that had been set up. The Commission would then make recommendations to the Court regarding the case. Authority was also given to grant relief to lessors by way of remission or reduction of rent. This was a very much wider power "than was provided under the existing legislation and would apply to all leased premises. Mr W. Nash (Lab., Hutt): Weekly premises J Mr Forbes said there would have to be some permanency of tenancy before the provisions of the Bill applied. It would not apply to premises which were rented only for a week. There was also power for the Court to review personal covenants. Chattels Not Afiected.

Beplying to an interjection, Mr Forbes said this provision would apply to land but not to chattels. It was left to the Court to decide cases of hardship. The Court had power to reduce or remit interest and to exfend the period of the mortgage. Mr Langstone: Is there any chance of reducing the principal? Mr Forbes: There is no power to reduce the amount of the principal, but there is power to extend the period. It is not possible to cover every case under this Bill.

Continuing, Mr Forbes said that if any attempt were made to anticipate the provisions of the Bill prior to its coming into operation, the Government would take steps to deal with the position. Mr A- S. Eichards (Lab., Koskill): Is any relief provided for chattel securities f.

Mr Forbes: Chattel securities were dealt with under the previous Act. The only alteration in that respect is giving them longer time. The time has been altered from seven days to fourteen.

Mr Forbes added that farmers had to depend a great deal on the assistance they received from stock and station agents, and the Government N did not considor it would be wise to do anything to prevent stock and station agents from continuing that assistance.

Labour Complaints. Mr H. E. Holland, Leader of the Opposition, said it seemed to him that what the Government now proposed was an improvement on the existing legislation but what disappointed him was the wide difference in the methods of dealing with the wages of working men and the money lent by mortgagees and others He considered that a statu torv reduction of interest, rents, and bo forth was wanted. The Arbitration Court had had power to deal with wages but the Government was now taking it away. It was, however, maldrnr provision for that power to be used in connexion with mortgages, The logical thing to do would be to reduce fixed charges to enable those who had had their wages reduced to meet their commitments. Mr E McKeen (Lab., Wellington South) said the Government had had an opportunity to do something definite W was not making a straight-out reduction of interest. The Economic Committee had favoured a cut of twenty per cent, in interest rates and rent but the Prime Minister had not referred to

this. He thought people would be disappointed with the Bill. Mr W. Nash (Lab., Hutt) said he was sorry to hear there was to be no general reduction of interest rates.

Object of the Bill. The Hon J. G. Cobbe said that with tho passing of the present Bill it was believed that many- mortgagors ana mortgagees would be able to come o terms. He did not believe a measure going as far as this Bill had ever been introduced in Parliament m the history of New Zealand. The Government s object was not only to protect people in their homes and businesses but also to keep the farmer on the land. Ihe personal covenant was a very di question to deal with by legislation. N Act should be put into operation it it were likely to prejudice lending in Mr W. E. Barnard (Lab., Napier) said he was anxious to know whether the Bill made provision for a reduction of house rents.

Equality of Sacrifice. Replying to further Labour complaints that no provision had been made or straight-out reduction «f 3ntere^' a J e3 and rents, Mr Forbes said the Bill before the House was not one m which anything could be put regarding statutory reductions of tins land. already told the House that there would be no class of the community that would escape in connexion with thcgcncra sacrifice. So far there had been no statutory reductions at all. Thero werc other measures yet to come down m regard to reductions right throug:h. Replying to Mr R. Sernple (Lab., Wellington North), Mr Forbes said leases with respect to tho renting of houses would come under review in connexion with the Bill. Tho Bill was read a first time.

SUMMARY OF MEASURE. POWERS OF PARTIES. [From Oub Parliamentary Reporter.] WELLINGTON, March 16. The Bill releases a mortgagor from the obligation of waiting for a mortgagee to give notice of his intention to exercise his powers of sale before applying to the Court for relief. In future a mortgagor may apply to the Court even though tho mortgagee has not notified his intention to exercise his powers.

It is laid down under section five of the Mortgagors Relief Act that a mortgagee is entitled to one month's notice of a mortgagor's intention to exercise his power. If a mortgagor does _ not make application to the Court within that period, the mortgagee is .entitled to proceed. Under the amending Bill a mortgagor may, by leave of the Court, apply for relief after the expiration of this period, but it must be shown that the delay of tho mortgagor was excusable. Special provisions as to the relief of mortgagors in the case of farm _ lands will, under tho proposed legislation, be oxtended to all classes of mortgages. Where application for relief is made by a mortgagor under a table mortgage tho Court, in addition to or in lieu of any other relief, may extend the term of that mortgage by any period not' exceeding two years, and may jiostpone for a similar period the due date for the payment of every instalment of principal and interest due and unpaid at the date of the order or thereafter becoming due. Any order for the extension of such mortgage may be made subject to such conditions as the Court thinks proper, including a provision for the payment of interest during tho period of postponement on any postponed instalment of principal and interest. Provision is also made for the private settlement on similar terms providing the powers of the mortgagor tinder such mortgage are not limited in consequence.

" Power is also given the court to deal with the question of personal covenant as it affects mortgages on land. On application made by a mortgagor, tho Court may postpone for such period as it thinks fit the right of the mortgagee to sue for or recover as a debt from the mortgagor by auction in any Court the principal moneys or any part of the principal moneys or any interest or other moneys then or thereafter becoming payable under the mortgage. The Court may also make an order determining any such right either as to the whole or a defined portion of any principal moneys or interest or other moneys. Such an order shall not extinguish a debt to which it relates or affect any right of mortgages or any other person to prove such debt in the ev«nt of the bankruptcy of the mortgagor or to recover any moneys from any persons other than the mortgagor named in the order of the Court. Any application or order may be made to or by the Court, either before or after the mortgagee has exercisd any powers of sale or other disposition of mortgaged property.

Belief of. Lessees. The second half of the Bill deals with tho relief of lessees in certain cases. A lease is defined as an instrument whereby a leasehold interest in land is created, whether at law or equity. Nothing in this section shall apply with respect to leases executed April 17th": 1931. 3 ' Any lessee under a lease defined as above may apply to the Court for relief. He may seek a reduction of rent payable under the lease for the remainder of the term where the unexpired term of the lease is not more than two years, or where the lease has more than two years to run a reduction of rent for a period not exceeding two years. In addition, he may apply for a remission of rent in arrears at the date of application for relief or both a a reduction in rent and a remission of arrears. . On the service on r,he lessor of a copy of the lessee's application for relief and until the application has been disposed of by the Court, the lessor shall not seize or sell any property nj way of distress for rent due under the lease or exercise any power of re-entry on the land comprised in the lease or any power of determining the lease. After that the lessor shall exercise any power only in accordance with the order of tho Court. Where tho annual rent reserved by any lease does not exceed £lO4, the jurisdiction conferred by tho Court may be exercised by a Magistrate. In any other case it must be exercised by the Supreme Court.

Amendments to Main Act. Several miscellaneous amendments to the former Act are made. A mortgagee is not entitled, without leave of the Court, to issue a judgment summons. The period within which a mortgagor may apply for relief in respect of chattels after notice has been served by the mortgagee, is extended from seven to fourteen days, but this provision does not affect any notice given before the passing of the Bill. An order of the Court reducing the rate of interest payable under any mortgage pursuant' to the Mortgagors Belief Amendment Act may, in the discretion of the Court, be for a period less than the full term of the mortgage, and it shall not in any case be for a term exceeding two years. Applications for relief of mortgagors or lessees are to be referred bjr the