EVENING SESSION

Otago Daily Times, Issue 21601, 23 March 1932, Page 8

EVENING SESSION

The debate was' continued when the House resumed at 7.30 p.m. Mr A. S. Richards (Roskill) suggested the insertion of a clause in the Bill to enable poor people to approach the court without the necessity for paying legal costs, otherwise the benefit from the legislation would disappear so far as they were concerned. , Mr F. Lye (Waikato) emphasised the necessity for care lest the confidence of investors should be destroyed. Remarking that not many years ago mortgage money had been found to enable men to go on the land, not on the amount of the •ecurity, but because the men were of the right type, Mr Lye said he thought the personal covenant should be retained. Mr J. A. Lee (Grey Lynn) said it was no use forcing tenants out of their security and then selling the property at a lower price to somebody else. It would be far better to • make a reduction on behalf of the original tenant. The Minister of Finance (Mr W. V. Stewart) said it was difficult for the Government to act justly towards all the conflicting interests in connection with legislation such as that now. before the House. Replying to a point raised by the Leader of the Opposition (Mr H. E. Holland), the Minister said that Mr Holland had complained that in the case of a mortgagee the question of sacrifice was left in the hands of the court, while this was not done in the case of a worker. lne Minister pointed out that it had been loft to the discretion of the court whether there should be a reduction in wages. Mr Holland: Will the Minister agree to instruct the court to make a general order with reference to interest rates? Mr Stewart: That depends on whether it becomes necessary. ~ Replying to Mr C. A. Wilkinsons suggestion that power should be given to extend the term of mortgages by five rather than two years, the Minister said it would be quite feasible to review the term stipulated by the Bill if the .crisis continued, but to grant an extension beyond a reasonable period would only make recovery more difficult. It had been suggested, the Minister continued, that magistrates should be given power to deal with cases relating to rent where the sum involved was £4 weekly instead of £2 wceklj, a 8 provided by the Bill.. He agreed that this was worthy of consideration it it involved a saving in expense, and he would refer it to the Prime Minister, who was fn charge 0 of the Bill. Mr Stewart affirmed that there was power under the Bill for the court to end the personal covenant. He explained that the Trime Minister had misunderstood the question when he had indicated that the court did •not have the power to determine the q»estion He went on to say that the clause dealing with the personal covenant was denned to free the mortgagor from persecution, especially in cases where the mortgagee threatened not only to sell tip the property but also to proceed further n the hope that relatives or others would come to the assistance of the mortgagor with a view to saving him from bank■niDtcy. There might also be cases in which it was clear that the personal covenant had not been taken substantially into account when the mortgage was arranged, and it was here also that the court might think fit to afford relief It had been originally intended to dratt a clause along these lines but there were indications that it would have been very complicated, and it had been thought that it was better to leave the matter to Ihe good sense of the court. Remarking that instances might arise where a reduction in interest rate* would leave the Tnortsacee in a more invidious position thM mortgagor would otherwise have Veu in, the Minister said he thought t was wise that discretionary power.should be left with the court even if legislation were introduced later dealing with flat rate reductions.

The Bill was read a second time at 1.20 am. In committee an amendment was accepted on the lines indicated by Mr Stewart earlier in the evening, namely, to increase the jurisdiction of magistrates to enable them to review cases where rents amounted to £4 per week. The Bill was read a third time and passed, and the House rose at 1.47 a.m.