LOANS ON PROPERTIES

Otago Witness, Issue 3775, 20 July 1926, Page 61

LOANS ON PROPERTIES

WELLINGTON, July 13. The law which ties the hands of the Publio Trustee regarding loans on properties is to be altered during the current session of Parliament if the present intentions of' the Government are given effect to. The subject arose in the House to-day, when the Speaker announced that he had a paper from the Controller and Auditor-General. The Prime Minister, who said that he was aware of the contents of the paper, fearing that the matter might be looked upon as serious by some of the members, explained the position. He said that the Public Trustee was bound by Act of Parliament as to the amount of money he lent on a property. That amount was three-fifths of the Government valuation, and there had to be a revaluation at the end of the five years, which was the term of the mortgage. The case in question was one in which the Public Trustee some years ago advanced a sum of money to a widow. At the end of the last five-yearly period she asked for a rerewal The revaluation showed the value of the property to be a little less than the value required for the sum originally lent. The Public Trustee took the attitude that he was not prepared to place any further burden on the woman, and he realised that, had he done so, she would not have been able to pay. She had always paid all the charges in connection with the loan promptly, and the Public Trustee decided to renew the loan, despite the slight fall in the value of the property. In regard to the report referred to, the Controller and Auditor General said that the Public Trustee had not power to So beyond the law. “Technically,” said Ir Coates, “that is correct, but the Public Trustee did what he thought was best in the interests of ths office and its client.”' Mr George Forbes: A widow? Mr Coates: In this case it happens to be. Mr Coates said he thought that, in the circumstances, the Controller could quite easily have overlooked the technicality instead of taking to task the Public Trustee. This was the sort of thing which cropped up over and over again. Properties receded in value, and there were instances where losses were sustained to ail concerned through the properties having to be sold, whereas that could often be avoided by continuing to advance as before on the slight fall in value. It was certain the matter would come before the House again, as it would be necessary to amend the law in the direction of providing the Public Trustee with discretionary powers to get over such difficulties. Sir Joseph Ward endorsed the attitude of the Prime Minister. He said if the interpretation which the Controller had put upon the law were correct the sooner the law was altered the better, for the existing conditions might, mean ruination to hundreds of people. He ventured to say that in this case the widow would be unable to get the money from anyone else. He was willing to support any legislation which removed the anomaly and gave discretionary power to the Public Trustee. Anyone who stood against an amendment of that kind would be standing against the interests of many a good settler. Mr Fraser maintained that whatever the personal opinion of the Controller in a case of this kind, his duty was clear, and after all the action taken was the best way to get the anomaly removed. Mr R. W. Smith (Waimarino) agreed that legislation was necessary, as the present law, if carried into effect, would force a large number of settlers off the land. Mr Savage (Auckland West) said he would like to know how serious was the position they were going to be landed in. It might lead to hundreds or thousands of other claims. A principle 3f that kind should not be allowed to go through without strict investigation. Before they affirmed the general principle they should hove the fullest information. Mr Geo. Forbes (Hurunui) said he was surprised at a member of the Labour Party standing up for the mortgagee, who generally wanted his pound of flesh. The present case was on lending up to three-fifths, but the State in the case of housing advanced up to 95 per cent. The legal profession was not friendly to the Public Trust Office, and would be only too glad tJ seize upon such a case. He, however, thought some latitude should be given to tbe Public Trustee in cases like this. Mr H. E. Holland said it would be better to delay the question till all the members had an opportunity for seeing what was in the Auditor-General’s report. He took the strongest objection to the remarks of Mr Forbes in regard to what Mr Savage had said. Mr Forbes had misrepresented what that hon. gentleman had said. He thought the Public Trustee did quite right in this case, though the Auditor-General was right in raising his objection. The depreciation might be only a temporary one. He agreed with Mr Savage that all the available information in regard to possible similar cases should be obtained. He believed everyone had confidence in the present Public Trustee. Mr Lysnar (Gisborne) said the matter involved In this case was trivial, but the principle was important. The Public Trustee should be given some further latitude. . The matter was referred to the Public Accounts Committee.