VIRTUAL MORATORIUM

Manawatu Standard, Volume LX, Issue 209, 2 August 1940, Page 6

VIRTUAL MORATORIUM

MORTGAGOR PROTECTION. IMPORTANT REGULATIONS. Per Press Association. WELLINGTON, Aug. 1. A virtual moratorium is imposed tor the duration of the war by t e Mortgages Extension Emergency Regulations, 1940, which were gazetted today. Protection is afforded in cases outside the scope of these regulations by the Debtors Emergency Regulations, 1940, also issued to-day. They supersede the Courts Emergency Powers Regulations gazetted on the outbreak of war and which gave extensive protection to mortgagors and debtors of every description. An explanation of the new regulations was given by tlie Attorney-General (lion. H. G. R. Mason), tliis evening. Mr Mason said that the Mortgages Extension Emergency Regulations applied to a mortgage of any property, whether real or personal, or of things in action such as a liie insurance policy. Agreements for sale and purchase were also protected, the purchaser being treated as a mortgagor. Similarly a lease with a purchasing clause was protected, and if necessary tlie lease could be extended so as to protect the lessee’s right of purchase. The protection given virtually amounted to a moratorium for the duration of the war.

The regulations, said Mr Mason, precluded the calling-up from any mortgagor or guarantor of the prmcipalsum, or any part of the principal sum secured by a mortgage, or of the exercise of any power of sale or entry into possession .unless the mortgagor had abandoned the property. Similarly, actions or proceedings in Court for th.'. principal sum could not be taken without the leave of the Court. '■ RECOVERY OF INTEREST.

Penal rates for recovery of interest could not be enforced without leave of the Court. Where periodical payments were made which included an instalment of principal and interest tlie whole payment was treated for the puposes of the regulations as if it were all interest. The Court might in its discretion in_ an actiun for interest give judgment for payment at a date to be fixed, or for payment by instalments at sucji time as the Court determined. Where the principal sum exceeded £2OOO the Supremo Court alone had jurisdiction, but for amounts under that the Magistrate s Court also had jurisdiction. There'was no appeal from one Court to the other. There could be no contracting out of the regulations, and a mortgagor’s consent to the performance of any act by a mortgagee which would otherwise require an’ application to the Court was effectual only if; witnessed by a solicitor employed independently of the mortgagee who certified that the consent was given by his advice. “Tlie chief difference between these regulrf-ons aud the ones they supersede,’’ said Air Mason, “is that the new regulations do not in any way require that the mortgagor show that his difficulty is due to war conditions.” Referring to the Debtors Emergency Regulations, Air Ala,son said that they afforded protection in cases outside the scope of the Alortgages Extension Emergency Regulations. In the superseded regulations the one set of principles was made applicable to all cases, but it was found in practice that the two sets of cases really required handling rather oifferently. MEMBERS OF FORCES. Under the Debtors Emergency ■ Regulations certain action, could not be taken against members of the Armed Forces or their dependents, except by leave of the Court. In the ease of dependants, leave had to be obtained before action could be taken. Other persons might ' obtain the protection of the Court, but in their case it was necessary for them expressly to apply to the Court for the protection.

The protection which might he granted applied to tlie seizure of goods in hire-purchases, writs for the possession, seizure or sale of any property, the issuing of judgment- summons or of an attachment order, the sale or leasing of property under the Rating Act, the filing of a petition in bankruptcy or a winding-up petition, the appointment of a receiver, the re-entry or determination of a lease, and distraint for rent. The Cou-rt was given full discretionary powers as to affording protection. Where the property in question was less than £2OO jurisdiction could be exercised by the Alagistrate’s Court. Tlie provisions against contracting out and as to the consent by a debtor to the exercise of powers were similar to those in the Afortg.ge Extension Emergency Regulations.’