DRASTIC OVERHAUL

Hawera Star, Volume LIV, 28 March 1935, Page 7

DRASTIC OVERHAUL

MORTGAGE ADJUSTMENT BILL SERIES OF AMENDMENTS POWERS OF COURT OF REVIEW. (By Telegraph—Prass Association ) WELLINGTON, Alarch 27. Drastic overhaul of part five of the Rural Mortgagors Final Adjustment Bill is made in a series of amendments introduced by the Government in the House to-night. This part deals generally with the matter of making adjustments of liabilities of mortgagors at the end of the “stay order” period of five years.

The first amendment allows the Court of review on the- joint a application of the mortgagor and of the mortgagee, or of all, the mortgagees interested in the farm property of the mortgagor, to proceed before- the expiration of five years to make adjustments in accordance with the procedure laid down by the Bill.

Clause 58. which provides for the allocation of equity of up to 20 per cent, on the basic value to the mortgagor, has been eliminated. AVhon the productive value of the mortgagor s farm land has been ascertained the adjustment commission shall determine whether or not the value is a fair one to serve as a basis for the adjustment of the mortgagor’s liabilities, as in the original draft. The commission will then proceed to fix a sum representing the provisional basic value. A new provision states that the commission after having fixed the provisional basic value shall notify the mortgagor and mortgagee of (a) the average annual value placed upon the stock and chattels for the purpose of determining the net average annual income derived from those lands; -(b) the productive value of those lands; (e) the provisional basic value of those lands. The parties concerned have the right of appeal from the valuations made by the commission, but the appeal must be made within 2S days. The court, however, may at its discretion extend that period.

APPOINTMENT OF ASSESSORS. Within 21 days of the lodging of ail appeal the mortgagor or any , mortgagee may file notice that- lie requires assessors to bo appointed to sit with the court for the purposes of the appeal, and in such a case one assessor -shall be appointed to represent the interests of the mortgagor and one to represent the interests of the mortgagee or of all mortgagees. Either the mortgagor or the mortgagee may appeal personally or may be represented by counsel when the appeal is being heard, and may calll evidence as value of the mortgagor's farm property. The court may also as it thinks fit obtain the opinion of expert valuers, or of such other persons as in tho circumstances it may require. The assessors shall be deemed to be members of the court, and the decision of the majority of members shall be deemed to be the decision of the court. If the ba-sie value of a mortgagor’s farm lands is less than the total amount secured by tho mortgage of those lands the amount so, secured shall be deemed to be reduced to an amount equal to the basic value. If the farm lands of the mortgagor coinprise two or more areas subject to different mortgages the basic value of the farm lands shall be apportioned among the several areas as the court deems equitable, and the amount secured on any such area (to the exclusion of other areas) shall be separately adjusted in accordance with such apportionment. If there is more than one mortgage on the same land the total amount deemed to; be secured thereby shall be apportioned to the several mortgages in order oi their priority. If the value of the mortgagor’s stock and chattels is less than .the •total amount secured b.v tho mortgage on such stock and chattels the amount so secured ,shall be deemed to be reduced to an amount equal to the value of such stock and chattels. If there is more than one mortgage on the same stock and chattels the total amount deemed to be secured thereby shall be appropriated to the several l mortgages in order of their priority.

The date when the reduction so made in mortgages becomes imperative shall be fixed by order of the court, but the date specified may be earlier or later than the date of the court’s order.

UNSECURED CREDITORS The amount by which any mortgage may he reduced shall he deemed to be a debt due by the mortgagor to the mortgagee, who shall be deemed to be an unsecured creditor to the extent of such aii amount and entitled to share in any assets that may be realised for the benefit of unsecured creditors.

On the ascertainment of the basic value of the farm lands of any mortgagor the court shalFdetermine whether or not he is to be entitled to continue in the use and occupation of the lands. The court shall take into consideration the conduct of the mortgagor during the operation of a stay order, the claim of any mortgagee to be allowed to take over farm lands and any other matters it may think proper. The mortgagor, however, may elect not to continue in occupation and is obliged to file notice to that effect within 28 days.

If the court, determines that the mortgagor is not entitled to continue in occupation it may on the application or any mortgagee give to that mortgagee the right to take over the farm lands of the mortgagor, subject to all prior encumbrances (exclusive of any arrears of rates, taxes, interest or other charges), and subject to the condition that he shall pay to the mortgagor in cash an amount of compensation to be fixed by the court as re-

muneration for his services during the operation of the stay order.

in ascertaining the amount of compensation the court' shall take into consideration the amount allowed to the mortgagor for living expenses during the 1 operation of the stay order," and the amount, if any, by which the amount so allowed as living expenses togother with the value.of accommodation and farm produce used by the mortgagor and his family, falls short of reasonable remuneration for his work.

SPECIAL PROVISIONS If the mortgagor elects not to continue in occupation the following provisions shall apply: (a) The mortgagor shall thereupon be released from his obligations under any mortgage on the farm lands, including any obligation under any personal covenant; (b) any mortgagee may with the leave of die court take over the farm lauds of the mortgagor on the terms and conditions prescribed by tin; court.

If the lands of the mortgagor are not taken over by the mortgagee the court shall direct them to be off ere! for sale by auction on conditions to be fixed by the' court. It shall be a condition of sale that an amount of purchase money not less than the amount of the compensation to be paid to the mortgagor shall be paid in cash, and that out of the amount so paid in cash compensation shall be paid to the mortgagor as the court directs.

Another amendment excludes the guarantor of a mortgagor from the secured creditors entitled to participate in any realisation of free assets.

'lhe provision allowing a guarantor during the operation of a stay order to apply to the court to assess the amount of his liability is extended to allow any mortgagee having a claim against the guarantor to make similar application. A minor alteration affecting agreements for voluntary adjustments provides that the memorandum of adjustment shall he signed by not less than three-fourths (of value) of the known creditors,