FARM FINANCE

New Zealand Herald, Volume LXXII, Issue 22142, 22 June 1935, Page 12

FARM FINANCE

ADJUSTMENT PERIOD REMOVING A DIFFICULTY SECURITY FOR ADVANCES DIRECTION BY COURT [I)V TELEGRAPH —OWN CORRESPONDENT] WELLINGTON, Friday The acting-Minister of Finance, Hon. A. Hamilton, stated to-day that representations had been made to him that certain dairy farmers who have made, or who contemplate making, application for adjustment of their liabilities under the Rural Mortgagors Final Adjustment Act will be placed in difficulty in the matter of securing the necessary inter-seasonal finance to enable them to meet living and working expenses until the new season's returns come in.

Stock firms and other lending institutions which have financed these operations in the past are said to have misgivings, as it is feared that in the event of a stay order not being granted there would he no security for advances made to the provisional trustee, who would be embarrassed in tho recovery of expenditure or advances made before seasonal returns are available.

Matter Referred to Review Court The actual incidence of such cases is not likely to be wide, as in the event of a stay order being granted no difficulty could arise and it, is reasonable to assume that in the great majority of cases stay orders, will be granted, but at the outset lending institutions will not be able to foresee with certainty whether or not stay orders will be granted. Mr. Hamilton, realising that such apprehension unless removed might have the effect of preventing provisional trustees obtaining the necessary finance to make advances until the issue of a stay order is decided upon, and thus cause embarrassment both to farmers and the smooth working of the Act, has discussed the position with the Hon. J. G. Cobbe, Minister of Justice, who is administering the Act, and the matter has been placed before the Court of Review for consideration.

The Court recognises that the making of advances in anticipation of seasonal income is a customary usage and is an absolute necessity in many cases to enable farmers to carry on between seasons. The Court is of opinion that a provisional trustee in respect of such advances, properly and reasonably made, must have a first charge on the revenue as in the case of a trustee acting under a stay order. Direction to Commissions After considering the matter the Court has met the position by issuing a direction to adjustment commissions, under powers given to it by the Act, to the effect that stay orders will not be refused until seasonal returns are available to enable the provisional trustee to be repaid all sums reasonably and properly expended by him, or an undertaking given by the parties asking that a stay order be not issued, that the powers of sale will not be exercised until such advances have been paid out of revenue and will until repaid to the provisional trustee be first charge thereon. Appropriate orders will in each case be made.

Provisional trustees will thus be put on the same footing as trustees under a stay order, as if an order was made.