A MORTGAGE CASE.

Gisborne Times, Volume LXVI, Issue 10412, 20 October 1927, Page 6

A MORTGAGE CASE.

APPEAL UPHELD'. EBNCH'COMMENT 6k UNJUST • . . POSITION. “ABSOLUTELY IDIOTIC LEGISLATION.” WELLINGTON, Oct. 19'. The Court of Appeal heard tu-day a ease in which the State Advances Superintendent ’appealed against the decision of,Mr Justice lleed at Wanganui in favor of the Aotea District Maori-;-Land' Board in the case in which the former was the first and second mortgagee and the latter the lessor of lands granted to Elsie May Guile. The lessee made deiault, both in • the payment of rent to tho respondent board, amounting to £l6O, and. in respect of the mortgages to the State Advances Superintendent, under which there was owing £SGS. When oh June 30 this year, the respondent board ■ re-entered the premises the question arose as to who bad priority against the improvements to the property, which were valued at £I4OO, for the satisfaction of their claims, the lesser or the mortgagee? -Mr. Justice lleed bold that any .moneys, received by a mortgagee in respect .to the value of the improvements where the lessor had re-euter-ed lor non-payment of tho rent should be applied .’first in payment to the lessor of all rent aud other moneys owing by ‘the outgoing tenant in re- , spec.o of his tenancy, secondly, in tho extinction or reduction as the case may be of moneys owing in respect ol' tho mortgage, and, thirdly, the balance, if any, should be paid to the outgoing tenant. > Mr. Fair, K.G., appeared for the State Advances Superintendent, and Mr. Izard, of Wanganui, for the Maori Land Board. The Court allowed the appeal without calling upon Mr. Fair to reply. Tins judgment materially alters Mr Justice Heed’s judgment, to the extent that the order of priority in a claim against any improvements to a leasehold property is as follows: (1) The mortgagee to tho extent of his mortgage'de’ot; (2) the lessee obtains the balance after the payment of .the mortgage debt. The lessor is left in tluvuniortunatc position of having to satisfy liis claim by right of action against the tenant. All the judges, caustically referred to what Sir William Sim termed an “absolutely. idiotic piece of legislation,” namely section 07 of the Native’ Ijaud Amendment Act, 1913, which brought about an unjust position. The Court, however, was unanimous in its opinion that the meaning and object of the Act gave them no option but to give judgment for the. State Advances Superintendent. ' No costs were allowed.—P.A.