MORTGAGORS AND TENANTS

Evening Star, Issue 21054, 17 March 1932, Page 17

MORTGAGORS AND TENANTS

AMENDING RELIEF BILL ALL LESSEES INCLUDED [From Our Parliamentary Reporter.] WELLINGTON, March 16. The Mortgagors’ and Tenants’ Rclief Act Amendment, introduced in the House to-night by Governor’s message, extends the provisions of former legislation to all leases of property. The Prime Minister, in a full explanation of the measure, said it would enable cases which were not covered by the previous Act to be dealt with by the court. Suggestions were made during discussion of the original Act for extensions of its purpose, but it was felt that, as it was a departure from any previous legislation, it would be well to see how .it acted before providing any further extension. The main Act had worked smoothly, a large number of settlements between mortgagor and mortgagee taking place outside the court. He believed that a large majority of mortgagees had fallen into lino with the spirit which was expected from people under present circumstances, and had made adjustments enabling farmers to carry on their industry. From his own knowledge, very substantial remissions in regard to i '■crest and mortgages generally had been made. In Canterbury there had been arrangements whereby the proceeds of a farm had been pooled, and an allowance made to the farmer to enable him to carry on; and, after certain payments had been made, the residue was divided between the stock and station agents, the banks, and whoever else had an interest in the property. This .enabled the work of the farm to proceed under a reasonable and businesslike arrangement, though in a great many cases there had been no profit, and the mortgagee had received no interest whatever. A WIDENED SCOPE, This Bill, continued Mr Forhcs, would extend the operation of the former measure so that it would apply to all securities, besides farming securities (Hear hear). Formerly it applied only to a farm mortgagee; now it would cover all mortgages. Mr Barnard: Town mortgages too? Mr Forbes; Yes. He added that the Bill gave a mortgagor the right to approach the court although the mortgagee had done nothing towards foreclosing. This would enable the court to . review a case where relief was asked. Adjustment courts were in operation, and whore a mortgagor appealed, his case would be referred to them, and a recommendation made to the court. This would enable investigation to be made, particularly in regard to farm lands, by those having knowledge of the business. “ Tho cost of approaching the court is a bar,” retorted Mr Semple. “ 1 have not heard that complaint,” replied the Prime Minister, who suggested that the relief given by tho court in merited cases should far outweigh tho cost of proceedings, which were kept as low as possible. 'Tho Bill would give the court authority to grant relief to lessees whether by way of remission or reduction of rent, as tho ■court had power to deal with rents, a very much wider power than formerly.

Answering a question whether it would apply to air rents, Mr Forbes replied that it covered leased premises, as all leases came under the Bill. It could hardly cover weekly tenancies, but only those which involved some permanent arrangement whereby the court could adjust the rental. There was also a flause under which the personal covenant in relation to mortgages could bo reviewed if hardship could be proved. , “ Docs it apply to chattels? ” asked a member.

Mr Forbes replied in the negative, and, answering another question, said guarantors were already covered by the legislation where there was an element of hardship: Mr Mason: Anything about reducing interest? The Prime Minister; “ The court has power to reduce interest, or to remit and extend the repayment period . f the mortgage, though there is no power to reduce the principal sum.” He believed the Bill would go a long way to meet many cases of hardship, though there were some personal instances which had been mentioned in the House which no legislation could cover. If there* was any attempt to anticipate the provisions of the Bill before it came into operation,' the Government would take steps to deal ivith the position, as was the case last session, when the date of operation was made retrospective. In any case, Parliament would be in session when the present Bill became operative. Chattel securities were dealt with in the previous Act, and the only alteration made was an extension of the date within which the holder of a chattel security could act, the borrower having fourteen days in which to make application to the court for review. Farmers had to depend a groat deal upon the assistance given by stock and station agents, and it would be unwise to introduce any provisions which would make it more difficult to conduct the present system of doing business. FIRST READING DEBATE. [Per United Press Association.l WELLINGTON, March 16. The Loader of the Opposition said it seemed to him that what the Govern-

ment now proposed was an improvement on the existing legislation, but what disappointed him was the wide difference m the method of dealing with the wages of working men and tho money lent by mortgagees and others. He considered that a statutory reduction in interest, rents, and so forth, was wanted. Tho Arbitration Court had had power to deal with wages, but the Government was now taking it away. It was, however, making provision for that power to bo used in connection with mortgages. The logical thing to do would be to reduce the hxed charges to enable those who had had their wages reduced to meet their commitments.

Mr It, M'Kccn (Wellington South) said tho Government had had an opportunity to do something definite, but was not making a straight-out reduction in interest. Tho Economic Committee _ had favoured a cut of 20 per cent, in interest rates and rent, but the Prime Minister had not referred to this.' Ho thought people would bo disappointed with the Bill. Mr W. Nash said ho was sorry to hear there was to bo no general reduction in interest rates.

The Minister of Justice (Hon. J. G. Cobbo) said that with the passing of the present Bill it was believed many mortgagors and mortgagees would bo able to como to terras. He did not believe a measure going as far as this Bill had over been introduced in Parliament in the history of New Zealand Governments. The object was not only to protect the people in their homes and businesses, but also to keep the farmer on the land. The personal covenant was a very difficult question to deal with by legislation. No Act should bo put into operation if it wore likely to nroiudice lending in the future. Mr W. E. Barnard (Napier) said he was anxious to know whether the Bill made provision for a reduction in house rents.

Bcplying to further Labour complaints that no provision had been made for a straight-out reduction in interest, rates, and rents, Mr Forbes said tho Bill before.the House was not one in which anything could bo put regarding statutory reductions of this kind. Ho had already told the House that there would bo no class of the community that would escape in connection with the general sacrifice. So far there had been no statutory reductions at all. There were other measures vet to come down in regard to reductions right through. Bcplying to Mr Semple, Mr Forbes said that leases with respect to_ Tenting houses would come under review m connection with tho Bill. Tho Bill was read a first time.