MORATORIUM LAW.

New Zealand Herald, Volume LXI, Issue 18896, 19 December 1924, Page 10

MORATORIUM LAW.

ACT FULL OF ANOMALIES.

RESTRICTIONS ON MORTGAGEES

DECISION IN TEST CASE.

[BV TELEGRAPH. —TRESS ASSOCIATION. ] NEW PLYMOUTH. Thursday. Until March 31 next there is a "close season" for mortgagors —their mortgagees cannot take action against them to sell them up or to recover 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 to day. 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 counsel, who asked Mr. Justice MacGregor, on behalf of two mortgagees, for leave to exercise their powers under the mortgages-they held. The submission of opposing connsel was that sub-section 3 of section 10 of the new Act prevented mortgagees from taking any steps under their mortgages, except to recover interest, until March 31, 1925, and even then, the mortgagee must give three months' notice of his intention. The only cases in which leave to take action could be given under the sections I mentioned were those where the mortgagee bad had to protect his security and i expend money, by reason of the mort- ; gagor's default, but such permission I would be with reference only to covenants thus broken. I His Honor held that sub-section 3of seci tion 10 did not authorise the Court to : give leave to sue for principal moneys or Ito sell up properties, and he therefore j dismissed the applications. Mr. Justice I MacGregor said the Act was full of i anomalies and inquired who drafted it. I He remarked that it practically made a j close season" for mortgagors until j March 31.

TWO OASES IN DUNEDIN.

JUDGE DOUBTS JURISDICTION.

[BX TELEGRAPH. —PRESS ASSOCIATION. ]

DUXEDIN, Thursday.

Ihe first cases to be heard under the Mortgages Final Extension Act, 1924, which was passed in the last'session of Parliament, came before His Honor, Mr. Justice Sim this morning in the Supreme Court.

Ihe applicant in the first case was Robert Hugh Bissett, of Timaru, retired farmer, and the defendant was Thomas Vernon Wilkinson, of Avondale, Nightcaps. The application was for an order granting leave to the mortgagee to exercise his powers of sale. Mr. H. Macalister, of Invercargill, who appeared in support of the application, said the new Act was badly drawn and that the Legislature had to a certain extent obscured its intention, but section 6 threw light on the intention. Assuming that they could not get relief by an order it meant that they could not get such relief till June 30, 1925. It would appear that the mortgagor in this case could remain in possession and let th'e grazing. Such a construction would lead to the greatest possible hardship and injustice on the mortgagee.

His Honor: The whole Act lias done that for years.

Mr. Macalister said that was so, but the mortgagees had always, had the right to come to Court. If that was the construction of the present Act it declared a "closo season" for mortgagors for about nine months. He hoped the Court would strive against an interpretation that would lead to that result.

Mr. J. S. Sinclair, who appeared for Wilkinson, asked that the matter be allowed to stand over.

His Honor decided to reserve his decision. Hp said he was not satisfied that there was jurisdiction to make an order.

Ihe othor case was a similar application bv James Miller, of liedgehope, farmer. The parties opposing were Richard Samuel Smith, of Oriti, and the estate of Joseph Sharp, deceased. After hearing argument His Honor adjourned the matter till the first sitting in Chambers next year.