VIEW OF LEGAL PROFESSION

Press, Volume LXXIX, Issue 24022, 10 August 1943, Page 4

VIEW OF LEGAL PROFESSION

MANY DIFFICULTIES FORESEEN EFFECT ON LANDOWNERS DISCUSSED (P A.) WELLINGTON, August 9. The Standing Committee of the New Zealand Law Society has issued the following statement on the Servicemen’s Settlement and Land Sales Bill; “The profession approves of the objective aimed at in parts I and 11, which are directed to the acquisition of land at reasonable prices for the settling of servicemen thereon. Some of the particular provisions in these parts are open to objection, examples of which are the following; “(a) Section six provides for the appointment by the Crown of the lay members of the Land Sales Court, and section 17 fo the appointment, also by the Crown, of members of the land sales committees, with the result that the owner of land has no representative, either on the court or on the committee. Appointees on these tribunals are appointed by the Crown and hold office at the pleasure of the Crown. “(b) Section 12 provides, in effect, that the two laymen on the court can override the judge. Such a position for one who has the status of a Supreme Court judge would be intolerable. “(c) By section 19 (5) a land sales committee, in dealing with any matter which comes before it, may ‘obtain the opinion of expert valuers or other persons as in the circumstances it may require.’ This means that the committee may go behind the backs of the parties and deal with the matter on evidence which neither party has the opportunity of meeting. "There are other sections in these parts of the bill which are open to criticism; but as staled above, the profession is quite in accord that the best means should be adopted for successfully settling servicemen. It may well be, however, that the arbitrary method provided in the bill for calculating the price of land in accordance with the ‘basic value' may lead to extraordinary results. Possibility of Evasion “The profession is, however, very much exercised in regard to the effect of part 111 which provides for the control of all sales of land and leases of land for three years or more. It is provided that every contract for the sale of any interest in land, and any contract for the leasing of land for a term of not less than three years is unlawful unless it is approved by a committee to be set up under the bill. It is understood that the proposed legislation is considered necessary as part of the stabilisation policy of the Government. If this is so, attention is directed to the fact that other stabilising measures arc for the duration of the war and a short period thereafter, but there is no such limitation in the present bill. “For whatever period the provisions are intended to operate, the profession is definitely of opinion that such drastic proposals will lead to evasion on a large scale. Members of the profession have definite information that in one Dominion where somewhat similar legislation has been enacted evasions are such as to make the scheme of little effect. It is, however, with the delays, difficulties, and extra cost, and the disturbing effect on the holders of a title to land that the profession is particularly concerned. “Lawyers have a very extensive ex- | pericnce of every kind of land transac- ■ tion. and they also have some knowledge of how the average person regards the title to his land. With many people the purchase of a house proi Perty is the one investment of a lifej time. In many cases, they never sell

nor do they desire to sell; but they always cherish the idea that the property is their own, and that they or their estate can sell, if they are so disposed, for such a price and to such a buyer as they wish. The restrictions provided by the bill will constitute a blot on an owner’s title, and owners will doubt whether they own the freehold. It is felt that it will have a most disturbing effect on all those who hold a title to land. Volume of Work “What has just been said deals with the broad aspect of the matter, but where the carrying out of the provisions is attempted, it is felt that such delay will occur as to make the measure entirely unworkable. In 1941 6260 transfers and leases were registered in Wellington. That would cover the Wellington registration district. It is pointed out that many leases for periods in excess of three years are not registered, so that the number of transactions to be approved in the Wellington district in a year may well approach 6500. It will be seen at once how impossible it will be for any committee or committees to deal promptly with the volume of applications that would be made, and what delays and uncertainty would result. “Then, too, there is uncertainty, when a contract is entered into, as to whether it will be approved—another feature which will create concern and lack of confidence. The extra cost and work must be a matter for serious consideration. The work must be done through the legal profession, who are already overburdened through depletion of staffs, and the cost must necessarily fall on the parties to the transactions. Examples of Difficulties “The difficulty in applying the act becomes more obvious when one considers some of the cases which have to be dealt with. Here are some examples: “(1) A mortgagee’s sale involves an application to a committee for leave to sell, preparation of the conditions of sale, the expense of advertising, etc. A mortgagee may go through all this process, and then find that even if he sells at auction, the sale is not approved by the committee. “(2) Auction sales, particularly where perhaps several sections are sold at one auction. The vendor and purchasers may not know for months afterwards whether the contracts they made are valid. Possibly purchasers in the intervening period may withdraw their offers. “(3) The formations of companies to take over a business. One can hardly imagine that business people would spend the time involved in negotiations of this kind, knowing that where land is involved the transactions and presumably all its details, must be discussed in open Court by a committee, always with the possibility that the transaction may not be approved. “Under section 58 the proceedings of the Court and committee shall be heard in public. This means that all the confidential details of every transaction of a sale, or lease of land for more than three years, are available to all who care to listen, including, of course, business rivals. Such a provision cannot be justified. “What has been set out above is the attitude of the whole legal profession to the measure. With its peculiar knowledge of the matters which are dealt with in part 111, it feels sure that the proposals will lead to such evasions, delays, difficulties, and cost as to make the measure harsh and oppressive. It has been considered advisable to inform the public of the society's view, and it is intended to obtain an interview with the Prime Minister (the Rt. Hon. P. Fraser) to make suitable representations to him.”