MORTGAGEES’ POWERS,

Hawera Star, Volume XLVIII, 22 December 1924, Page 8

MORTGAGEES’ POWERS,

RESTRICTIONS UNDER ACT. Until March 31 next there is a “close season” for. mortgagors; their mortgagees cannot take action against them to sell them' up or recover the principal sums under their mortgages. Such’ is the effect of the Mortgages Final Extension Act, 1924, as interpreted in the Supreme Court at New Plymouth yesterday. The ’decision is the first since the Act was passed last session.

The question of the interpretation- of the Act was brought before the Court by Mr. C. H Choker, who asked Mr. Justice MacGregor, on behalf of two mortgagees;, for leave to- exercise their powers under the. mortgages they held.. In; opposition to the granting of the leave, Messrs. L. M ; . Moss, 3T; C. Spratt, F. E. Wilson and H. R. Billing appeared on behalf of mortgagors and other mortgagees interested. Briefly stated,’the submission of the opposing counsel was that sub-section 3 of section 10 of the new Act prevented mortgagees from taking any steps under their, mortgages, except actions to recover interest until March 31. 1925, and even then the mortgagee must give three months’ notice of his intention; The only cases under which leave to take action could be given under the sections mentioned werecases where the mortgagee • has had to protect his securitiy and expend money by reason of the mortgagor’s default, but’ such permission would be with reference only to the covenants thus broken. His Honour held that sub-sec-tion 3 of section 10 did not authorise the court to give leave to sue for principal moneys or to sell up the properties,. and he therefore dismissed the applications. The Act was freely commented on during the hearing of the applications. Mr. Justice MacGregor said the Act was full or anomalies and inquired who drafted it. It practically made a “close season” for mortagors until March 31.

Mr. Spratt, in addressing the court in support of the opposing submissions, expressed the opinion that the Act was iiiiq-uitous, hut nevertheless it was the law. It was stited that one of-the effects of the Act is that a mortgagee, the fourth: for instance, may have an order over the mortgagor’s milk cheques and an assignment over his stock and chattels, and he may thus draw the whole of the proceeds of the farm, to the detriment of the other mortgagees. They may sue for interest, hut unless the mortgagor has other assets upon which execution can be levied, the judgement would be a barren one devoid of all tangible results.