APPEAL ALLOWED

Poverty Bay Herald, Volume LIII, Issue 16474, 19 October 1927, Page 8

APPEAL ALLOWED

PRIORITY IN CLAIMS IMPROVEMENTS TO LEASEHOLD PROPERTY (Per Press Association.) WELLINGTON, this day. The Court of Appeal heard to-day a ease, in which the State Advances Superintend! ril appealed against tne decision of .Mr. Justice Reed at Wangauui in favor of the Aotoa District .Maori Land board in the case in which the former was tlie fust and second inoitg-igee and Lie latter the lessor of lands granted (o Elsie May Goile. The lessee made default, both in the payment of rent to the respondent board, amounting to JJI6O, and in respect of the mortgages to the State Advances Superintendent, under which there was owing £865. When on June 30 this year the respondent board re-entered liie premises the question arose as to who had priority against the improvements to Hie property, which were

*, allied at £I4OO. for the satisfaction of its claims, the lessor or the mortgagee? Mr. .justice Reed held that any moneys recci\ed by a mortgagee in respe'et to the value of the improvements where the lessor had re-entered for non-payment of the rent should be applied first in payment to the lessor of all rent and otliet moneys owing by the outgoing- tenant in respect of his tenancy, secondly, in tlie extinction or reduction as the case may be of moneys owing in respect of the mortgage, and, thirdly, the balance, if any, siiouhl lie paid to the outgoing tenant.

Mr. Fair, K.C., appeared for the State Adsances Superintendent, and Mr Lard, of Wanganiii, for the Maori Land Board.

The court allowed the appeal without ca ling upon Air. Fair to reply. the judgment materially alters Mr. Justice Heed's judgment, to the extent that the order ot priority in a claim against any improvements to a, leasehold property is as follows : (1) The mortgagee to the extent of his mortgage debt; (2) The lessee obtains the balance after the payment of the mortgage debt. The lessor is left in the unfortunate position of having to satisfy his claim by right of action against the tenant. All the judges caustically referred to what Sir William Sim termed an "absolutely idiotic piece of legislation,".namely section 97 of the Native Land Amendment Act. 1913, which brought about an unjust position. The. court, however, was unanimous in the opinion that the meaning and object of the Act gave them no option but to give judgment for the State advances superintendent. Mo costs were allowed.