MORTGAGE RELIEF

New Zealand Herald, Volume LXXIV, Issue 22823, 2 September 1937, Page 8

MORTGAGE RELIEF

BY BARRISTER

RECENT LEGISLATION JUDGMENTS OF TRIBUNALS SOME TYPICAL DECISIONS . COURT AND COMMISSIONS

The following is the last, of a series rrf f our articles written specially for the Hejuld on the effect of the decisions so far reported of the Court of Review under the Mortgagors and Lessees Kehabilitation Act, ISI3O. "What, finally, have the decisions of the Court; of Review done to implement and interpret the bare provisions of the Act? A few of the more interesting of the reported decisions, having no particular relation one with another, are considered in to-day s article. ' It is evident that the Court of Review leans strongly toward giving the commissions as wide a power as possible, corsistent with justice and with the provisions of the Act. Section 35 provides that (except in exceptional cases) all applications for adjustment filed in the Court shall be referred to commissiccs, and the Court evidently expects th:.t the commission shall deal finally with all matters referred, except when some point of principle is involved. A recent , decision goes so far as to -say that an applicant, to succeed in an appeal against the productive value of a farm, as fixed by a commission, must be able to demonstrate that a. "miscarriage of justice" has occurred, f Findings of Fact A commission's findings on facts are thus very difficult if not impossible to upset. The Court of Review, in a word, is refusing to allow itself to be a scrutineer of facts; it is content to be a Court of Appeal on principle only. In the cases which reach the Court of Beview; too, this principle is adhered to in refusing to allow fresh evidence to be brought. The facts must be completely presented to the commissions, and if a party is so remiss as to fail to present all tho facts to the commission, he will not be allowed to add new evidence when addressing the Court of Review, This decision makes appeals to the Court of Review follow the existing practice obtaining in civil appeals to the Court of Appeal: here no new evidence can be presented except m special cases, e.g., if new evidence is discovered after the first hearing which no reasonable diligence of the parties could have discovered before. "The interests of the State" says the old maxim, "require that litigation should speedily reach finality," and it is upon this wise old saying that the Court of Review has'based its decision about fresh evidence. Beneficiaries and Trustees Can a beneficiary in a mortgaged estate apply for relief? This, and questions depending upon it, are the subject of some interesting decisions. It has been ddyided that a beneficiary, as such, has no standing before the Court. His trustee, may apply for relief, but * if the trustee neglects or refuses to do so, no relief mil ba given. This decision follows clearly from the definition of "mortgagor" contained in the Act. A "mortgagor" means an owner of property subject to a mortgage, and while a trustee, succeeding to the estate of a dead mortgagor-owner, falls within the definition, a beneficiary does not. An interesting question which has not yet been finally determined, however, is whether the circumstances of destitute beneficiaries can be taken into account in giving relief to an estate, i.e., whether, if an estate consists of a mortgaged property and some cash, the commission may take into account the circumstances of the beneficiaries and order the cash to bo distributed among them at tho expense of the mortgagee. Duty of Trustee It should be noted that while a beneficiary cannot himself apply, if his trustee wrongfully refuses or neglects to do so, ana the estate thereby suffers, ah action may lio against the trustee for negligence. While this has not been finally determined, tbe Court of Review has" in one of its decisions given a pretty strong hint of its vews in this connection. Soma l interesting cases have arisen . where mortgagors have died after making application or before the Court has heard their cases. The Act provides that their applications shall be carried on by their executors or administrators :" but in some cases where there is no will, it is impossible to get anyone to accept the onerous duty of administrator. What, happens then to the application? There may be infant beneficiaries who need protection. The Act is silent on this point, and it may be that this matter will require legislation to provide a satisfactory remedy. ' / Leases Not Extended Mortgages may be extended by the commissions, and in fact they very often are, but it has been held by the Court of Review that the terms of leases cannot be extended. This follows on a consideration of the nature of a mortgage and a lease; while a mortgage is a contract to repay money, tho date of' repayment being a matter which, is incidental, and consequently alterablo by the commission, a lease is a grant of an estate which completely terminates on the date of expiration, leaving no rights in the lessee which may be the subject of variation. Mortgages, where relief is granted, are nearly always the subject of extensions. It often happens that the applicant asks for an extension on an amortisation basis—a "table mortgage." The decisions here establish that this kipd of extension will be more readily ordered when the mortgagee is a "lending institution." Where the mortgagee is a private lender, it is considered proper to allow him to see the return ,of his money rather more promptly than a table mortgage will allow. ' Terms ol Extensions "Five years at 4$ per cent" is quite an average kind of extension, but special jerms can bo, and often are, included. It is becoming quite frequent j : or a "probationary period" to be ordered, to see if the mortgagor really intends to rehabilitate himself on the property, and for the commission in such cases, after ordering such a probationary period, to take into account the extent to which the mortgagor has looked fafter tho property, in making its final order. It. has been decided, too, in some cases, to grant relief conditionally upon certain/ repairs or renovations being effected at once by the applicant. (Concluded.)