NEW MORATORIUM

Otago Witness, Issue 3524, 27 September 1921, Page 20

NEW MORATORIUM

A COMPREHENSIVE BILL. REPAYMENX PROPOSALS. (Eeom Our Own Correspondent.) WELLINGTON, September 23. The Mortgages and Deposits. Extension Bill, introduced to-day by Vice-Regal Message is to supersede ihe Mortgages Extension Act, 1819, and ihe Mortgages Extension Amendment Act, 1821, with lire exception of clause 4 of tfie last-named. It confers power upon the Governor-Genei al-in-Coun-cil to make regulations “for giving full effect to the provisions of this Act, and for the due administration thereof.” The same exceptions from the application of the provisions are made as in the Act of last year—viz., trade mortgages and securities for loans granted under the Repatriation Act, 1918, with the addition of mortgages executed alter October 24, 1919, the date on which the Mortgages Extension Act of that year came into force. In addition to mortgages oilier inst ruments affecting land are brought within tiie scope of the measure, these including agreements for the sale and purchase of land if entered into before October 24, 1919, and leases of haul including an optional or compulsory purchasing clause granted before that date. The agreements lor sale and purchase are to be regarded under the now measure as mortgages of the land to secure the unpaid portion of the purchase money, while tiie purchasing clause in a lease is to bo treated as if the rent were the imerest on the mortgage, and the: purchase price were money secured by a mortgage. Exception to this portion is made in the case of an agreement for sale anil purchase under ihe Workers’ Dwelling Act, 1910, arid agreements or the sale and purchase of a leasehold interest, unless freehold land is included with the leasehold in (he agreement. With these exceptions and saving clauses it is provided that no mortgagee shall have the power to call up or demand the payment of the principal sum or any part of it, before .tun- 30, 1922: to exercise any power of sale or entry into possession conferred either by the mortgage or by statute, or wit lions the lean- of a Judge of the Supreme Court; to commence any action for breach of any covenant condition or asrreoiiiom expressed or implied in the moil -age Where the principal sum secured by a mortgage is already due. or falls duo before June 30. 1325. the morigagor is given liic option at any lime before March 31, 1522, of making apple alion for an extension. Tiie method of procedure provided in llns case ilili. is from ili.n in iinv of the previous measuu-s of tbe kind. The mortgagor is required before the date mentioned to send a notice to the Public Trustee making formal application for tinextension, and being required to pay fees rising from a minimum of 10 shillings to greater sums according to the amount of his debt under the mortgage. By making this application the mortgager is doomed to

offer to pay interest at the rate of 62 per cent, on the sum -ecured, unless he is al--1 eai’.y paying a rale in excess of that. Ho is also accepted to have undertaken to or- sve a ll the condition.- of the original ins, i uiiiem. except the r% payment clause, tor ihe further term. In addition, lie undertake, to make repayment b\ instalment.*, a,- laid down in the Bill. 'The grant, of the extension makes the - - condit ioi is obligatory upon the mortgagor, and give the against the mortgag- r, or cue guarantor of his. The Pa.hh'. Trustee, mi receiving a request, for extension, is required to nolily the lriort g:i go. ■. or his attorn . 111 the event of hi. absence from the dominion. If the mortgagee cannot, be found, and 1. * no atifirnov or authorised agent, (he notice is to be sent to tiie Public Trust Gllbo solii i<or. who watche- tiie imeio.-is of the mortgagee, and in the discretion of the Public i rustee may, on his behalf, oppose the application for extension. Tiie mortgagee is given one calendar month in which to lodge and objection to the application of the mortgagor. If he fails to do so ihe term of tiie instrument is automatically ext elided to June 30, 1925. on the conditions that interest is to be paid at least at tiie rate of 62 per cent, per annum; that is to say, if the rate set out in the mortgage is less than that, it becomes increased to that rate. The mortgagor is also required to commence repayment by instalments from January 1, 1923, 5 per cent, of the sum owing for that year, and 10 per cent, of the principal sum in each year thereafter, in half-yearly instalments. If the mortgagee lodges an objection to the instalment, accompanied by the fees prescribed, tiie Public Trustee must notify the mortgagor of that fact and send to the Land Board of the district in which the land is situated, copies of the mortgagor's application, and of the objection. The Land Board then appoints a time, hears the parties, and decides upon tiie rights of the case. Three members of the board are sufficient for a quorum, and at the hearing the board is not to be bound by the rules of evidence, bur may hear the case and decide as it thinks lit, accepting, if necessary, written statements in place of oral evidence. The board may taka into consideration: —(a) The effect of i the continuance of the mortgage upon tiie security afforded to the mortgagee. (b) The inability of the mortgagor to redeem the property, either from his own money or by borrowing at a reasonable rate of interest; (c) the conduct of the mortgagor in respect of any breaches by him of the covenants of the mortgage: \ (d) any hardship that would bo inflicted on the mortgagee by tiie continuance of tiie j mortgage or upon the mortgagor by the extension of it; and (e) any other relevant circumstance. The board may disallow the objection or grant it entirely, in which case the mortgagee will he able to exercise his powers in full after June 29, 1922, or may allow the objection in part, appointing a date earlier than June 30, 1925, as the date of tiie extension, and requiring ihe re- : payment of instalments larger than those I provided in the Bill. I The decision of the board is to he final I and conclusive, not being subject to appeal | to nor review by any court. The determt- | nation of the board is to be notified to the I Public Trustee, upon whom devolves the 1 duty of having registered against the title | of the land a memorandum setting forth the 1 decision or the extension, if no objection lias been made. If in addition to land, : chattels form part of the security in a mortgage, the extension in the case of the laud J simultaneously applies to the chattels, and ! is to be registered in the Chattels Transfer I Register where the security is over chattels I alone. Objections to extension ot the term j are to be considered and deterinind by the | Public Trustee, or any officer of the Public Trust Office, to whom he may delegate the Jn tv in the same manner as laid down for "land boards in the case of mortgages I over land. I Bv a furthei provision of the Bill every j mortgagee may by action after June 30, i 1922, enforce any covenant or condition, j expressed or implied, in his mortgage or in | the Bill other than a convenaiit for the re- : payment of the principal sum. The power of entry and sale is not to be enforced before 1925, unless the mortgagor has failed to apply for an extension, or having applied has failed to obtain it, or unless the mortgagee has obtained leave horn the Supreme Court. The court is given discretion to o-vant leave by summons in Chambers, if ft decides that' rho conduct of the mortgagor, or the condition or management of, or dealing with the mortgaged property has been such as to render it just and eqiulaole, that the restrictions imposed upon the powers of tiie mortgage*- hi ihiu pail of tue Act or any of the restrictions should be removed. The provisions of this part of the Act shall apply to the Crown with regard to the ease of money held on contract of deposit, either for a fixed term or at call. Where the sum or aggregate sums due by any one borrower to any one lender, does not exceed £IOOO the due date of tin <ontiact or O' mi racks is extended to December 31. 1522. Where the sum or aggregate of sums duo from one borrower to one lender exceeds £IOOO. the due date is extended to June 30. 1923. The conditions on which this relief is given to the borrower are:—(a) The borrower is to pay interest on the sum owing al the rate of 6? per cent; (b) unless the lender ’has notified in wilting to ihe borrower that he does not desire repayment by instalments, the borrower shall repay to the lender instruments of the principal sunt in t in* following manner: v. here -. i I'. total sum owe-1 does not exceed £ll • . 10 per cent, in 0:1 h of January. April, July, and October 19x2. and tlm balance of 6 pi.,, cent, on December 51, 1923 \\ hero ill.- total sum owed is in exec-.- of £IOOO, 7i per cent, is to be repaid in each quarter of :822. as n the previous case, a similar proportion i: January and April. 1923, an,; ifie l Inure of 55 per cent, on June 30. 1923. So long as the borrower observes the Condii im - laid il-.uvi lie- lend *• cani no t f,,.- 11:■ - iv--i.vo.-y of the money. | The Bill ecu lube- vitit a general saving clause slating th:i' “all pro-codings pending at the - mu.e: -m et of this Act. under al ,y enaitnieni hereby repealed, may be <-< iiit inn; d and completed a- if this" Act bail no: been pa-sed ; and all leave hereto fore granted bv tic Supreme t '.mi t under any such en v-i men!. or hereaitev granted by' the Supreme Colt ft. m any such pend- * ing proceedings, shall endmo for tiie purposes of Hi:--. Act as if granted thereunder.” Section 4 *if tbe 1971 Amendment Act. which remains in force, refer- I** the powers ! conferred on the Supreme t'.uirt by “The Wav Legislation Act. 1917." to suspend nr vary contracts afife led by the war. this power leaving been rceonferred b\ the ACt ' of thi3 year.