MAIN OBJECT OF BILL

New Zealand Herald, Volume LXXII, Issue 22058, 14 March 1935, Page 13

MAIN OBJECT OF BILL

RETAINING EFFICIENT MEN WIDE POWERS FOR COURT NO APPEAL FROM DECISIONS Seldom is, the object of legislation stated so emphatically as it is in the Rural Mortgagors Final Adjustment Bill, now before the House of Representatives. One clause expressly charges the adjustment commissions to " have regard to the fact that the paramount object of the Act is to provide a means of giving farmer mortgagors such relief from their financial obligations as will enable them to be retained in the use and occupation of their farms as efficient producers, except in cases where the giving of such relief would involve the imposition of undue hardfihip on mortgagees or other creditors." A similar motive is to guide the operations of the Court of Review, composed of a Judse and two other members, which is to be the supremo and final authority under the bill. No appeal from its decisions will be possible. It is provided that the "Court shall, in every matter coming before it, have full power and jurisdiction to deal with and dettirmino the matter in such manner and to make such order, not inconsistent with this Act, as it deems just and equitable in the circumstances of the case, notwithstanding that express provision in respect of such matter is not contained in the Act. No order of the Court shall be removed by certiorari or otherwise into the Supreme Court." Secirecy in Negotiations Moreover, the Court of Review is charged to sit not only as a judicial body to determine appeals and other matters submitted to it. "but it may also of its own motion lay down principles for the guidance of the adjustment commissions and may issue general directions to be observed by them in the exercise of their powers and functions." Power is reserved in the bill to appoint one of the Judgesipf the Supreme Court or the Arbitration Court to be the Judge of the Court of Review, instead of making a fresh appointment to the Bench. The preservation of privacy in the negotiations between creditors a.nd debtors is also provided for, in that no one is to have access to statements of assets and liabilities filed by a mortgagor, except the parties concerned or their agents. Trustees and Supervisors Immediately application is made to the registrar of the Court for the interference of the Adjustment Commission, he is to appoint a provisional trustee to control the mortgagor's estate. This trustee is to remain in authority until the commission has disposed of the case. It may be noted that, while the bill makes provision for the appointment of trustees and supervisors when stay orders are made, it is within the power of the Adjustment Commission to make the farmermortgagor either or both of these when it is considered that the appointment of outside persons is not necessary to protect the interests of the creditors, j A meeting of the mortgagor and his creditors is to be called by the adjustment commission as soon as practicable after the application for its interference has been filed. Although threefourths in value of the creditors may bind the minority in a settlement, they are not to have the final say in the matter. The Adjustment Commission is again charged not to approve of a settlement unless it is of opinion that the proposed adjustment is equitable. After its decision is made known, any creditor may appeal to the Court of Review, but the appeal must be lodged within 14 days of the announcement of the decision. Memoranda of all adjustments are to be entered on the title and other deeds affecting any property concerned in the settlement. Hire-Purchase Agreements The rules which should govern th© distribution of the income from the farm during the operation of a stay order are set out in the bill. Priority' is given to the living expenses of the mortgagor and his family and to adequate working expenses of the farm,,, then to current rates, taxes and rentsi and any statutory charges which have precedence over mortgages. When these, claims are satisfied the interest claims of mortgagees are to be met in order of their respective priorities. An important provision is that which restricts the rights of vendors under customary hire-purchase agreements when a stay order is made. The vendor is prohibited from seizing the chattel, but he may apply to the Adjustment Commission fojr possession or the termination of the hire-purchase agreement. The commission mav refuse the surrender of the chattel if it considers it is needed for the working of the farm and it can fix the amount to be paid to the vendor "during each year the stay order is in force. Among the provisions governing th® fixing of the equity of the mortgagor at the end of the stay order period is one charging the Court of Review to have regard to the equity possessed by the mortgagor prior to 1931. Tho Court is also to consider whether or not the mortgagee was a former owner of the property, the terms of sale by the mortgagee in such cases and the extent to which the terms of the sale have been complied with. Payment of Unsecured Debts When at the end of the stay order period an adjustment is made of the mortgages, amounts so discharged from the mortgages are to become unsecured debts owing by the mortgagor. Any surplus after the new value of the mortgages and the farmer's equity have been determined may become available to the unsecured creditors under direction of the Court. This surplus may be sold or mortgaged to meet such debts, but any claims outstanding after the surplus has been utilised will be deemed to have becNi discharged. 4 While provision is made for the relief of guarantors under & mortgage, the bill expressly provides that concessions granted to a mortgagor shall not operate to relieve a guarantor of his liabilities.