THE WAR MEASURE

Evening Post, Volume CX, Issue 134, 4 December 1930, Page 10

THE WAR MEASURE

PROVISIONS EXPLAINED

The war-time moratorium came into operation in 1914 with the passing of the Mortgages Extension Act, the full title of which was "an Act to limit the powers and rights of mortgagees during a state of war." The principal operative clause read as follows: — (1) So long as a state of war exists in New Zealand, and for such period as may be prescribed by regulations hcreunder, not exceeding six months after a state of war has ceased to exist, it shall not be lawful for a mortgagee without the leave of the Supreme Court — (a) To call up or demand jiayment from any mortgagor of the principal sum or any part of the principal sum secured by any mortgage. (b) To exercise any power of sale or entry into possession conferred by any mortgage or statute. (c) To commence any action or proceeding for breach of any coveuant, agreement, or condition expressed or implied in any mortgage other than a covenant, agreement, or condition for the payment of interest. (d) To commence any action or proceeding for any rate of interest higher than the reduced rate (if auy) provided in the mortgage in the case of punctual payment. (2) Application for the leave of the Supremo Court may be made by originating summons. (3) A state of war exists in New Zealand when His Majesty is at war with any foreign prince or State. (4) All Courts shall take judicial notice of the existence or termination of a state of war. Another clause set out the conditions under which the leave of the Supreme Court might be granted to call up principal, etc. This read as follows: (1) If the ground upon which such leave is prayed is that the mortgagor lias failed to pay the principal sum or any part thereof at any date, whether before or after the commencement of this Act, appointed for payment thereof, no such leave shall be granted so long as interest on the principal sum secured at the rate of interest provided in the mortgage is paid by the mortgagor within such time or times as the Supreme Court is hereby authorised to appoint in that behalf. (2) If the- ground upon which such leavo is sought is the breach of any covenant, condition, or agreement other than non-payment of the principal s\vm or any part thereof or nonpayment of interest, the Supreme Court shall in every case determine whether such breach is of such a nature as to seriously endanger the security of the mortgagee, and shall not grant such leave unless the Supreme Court determines that the security is so seriously endangered. In subsequent Acts, the principal Act was amended to give mortgagees and mortgagors power to contract themselves out of the provisions of the Act. Power was also given to the Governor, by Ordor-in-Council, to suspend or modify the principal Act. A Mortgages Final Extension Act was passed in 1924, and the Act was finally repealed in 1927.