MORTGAGORS’ BILL

Southland Times, Issue 21662, 26 March 1932, Page 5

MORTGAGORS’ BILL

UPPER HOUSE DEBATE

CRITICISM BY SIR FRANCIS BELL MEASURE PASSED (Per United Press Association.) Wellington, March 24. The Legislative Council met at 9.30 this morning when the Mortgagors’ and Tenants’ Relief Bill came before it for committal. The Leader of the Council, the Hon. Sir James Parr, said that the Statutes Revision Committee, while remembering that all the sections of the Lower House had agreed to the Bill, had felt that it was the Committee’s duty to remove some of the drastic features of the measure. After reviewing the Bill and the amendments proposed, Sir James said that a further amendment had been suggested to the effect that magistrates should be deprived of the right to send mortgagors to gaol under judgment summonses. That amendment would be submitted during the committee stages. _ The Hon. Sir Francis Dillon Bell said that he hoped that the Council would not accept the amendment in reference to the imprisonment of mortgagors. He said that he was opposed to the Bill but had been quite willing to aid the Government bysuggesting amendments. Sir Francis reviewed the legislation passed last year and said that the Council had accepted that on account of the special conditions prevailing. Special provision had been made with regard to farming lands and now it was proposed that every person operating under a mortgage could apply to the Court for relief, first for the postponement, then for the reduction of interest, and finally, for the wiping out of all or part of his arrears of interest. Last year the Government had represented that action -was necessary owing to the condition of the farming industry and that was the only precedent on which they were being asked to extend the provisions to the mortgagors of city sections. They were being asked to take an immense step, and the next logical step, surely, would be to apply- the provisions of the measure to bills of exchange. They’ were being asked to make a tremendous descent from the standards of honesty and fair dealing which had been a feature of the administration of every part of the British Empire. “I intend to vote against the Bill as a whole,” said Sir Francis, “and I think that the Government will give me credit for having made my position clear right from the start. I will not be a party to what I believe to ue a grave departure from the principles which have hitherto governed the relations of debtor and creditor in the country to which we belong.” Sir Francis said that the Council was being asged to make a tremendous change in the shortest possible time and it had been prevented from hearing the evidence. The only evidence which the Statutes Revision Committee had been able to take had been that of the Associated Banks, and he was surprised that the Government did not understand the warning issued by the chairman of the Associated Banks during the proceedings before the Statutes Revision Committee. Trading Mortgages. Sir Francis said that he had moved an amendment to exempt trading mortgages from the provisions of the Bid, as advocated by the Associated Banks, but this had been rejected and he intended to move it again during the committee stage. The Bill would have an effect on building societies which it was very difficult to realize, but they had not been given an onnortunity of stating their case. The same applied to private savings banks which carried a large number of mortgages on city properties. He held that it was the function of the Council to hear such evidence and to safeguard the rights of all individuals. For the first time in the history of the Council it had been asked to abijogate its normal functions. He submitted that there was no special urgency about the measure. If there had been the Government would have introduced it immediately after the opening of Parliament, instead of spending four weeks on another Bill which had not yet been considered bv the Council.

The Minister of Education (the Hon. Robert Masters), said that one would be led to believe that there had been a demand that evidence should be given before the Council but, as a matter of fact, neither he nor the Leader of the Council had received one application. If there had been any genuine desire to give evidence, surely the interested parties would have made some approach to the Council. The Bill had been before the Lower House for some time.

Sir James Allen: How long? Mr Masters: Three or four days. (Laughter.)

Mr Masters said the Statutes Revision Committee had heard evidence from the. Associated Banks, but he asked members of the committee if they had heard anything that they had not already known. There was real desire, on the part of the Government to get the Bill through the Council at the earbest possible opportunity as there was a feeling something would happen between the lessor and lessee if there was undue delay. "Bill Necessary.” He said the Bill had been made necessary' as a result of the depression which had inflicted great hardships on mortgagors. If they could help farmers to stay on the land they would be doing the country great service. Councillors should remember every application had to be considered by the Court. Sir James Parr: The Court has already rejected many applications. Mr Masters: That is so. In addition, adjustment commissions have been set up to consider every case. Is it likely that any great hardship is going to be inflicted on anyone after the facts of the case have been so thoroughly explored? I feel sure this Bill will do great service to the country.” Mr Masters concluded by saying they could not reduce the wages of the working class unless they were also prepaid to deal with fixed He appemed to the Council to put the Bill through all its stages that day. The Hon. M. Fagan said no discrimination had been made when the Arbitration Court reduced wages, but obstacles were being placed in the way when it came to a mortgagee losing some of his interest or principal. The Hon. D. Buddo declared that the Bill could not but be beneficial to the primary producers. It merely proposed a means of recourse to the Court as between mortgagor and mortgagee. The Hon. Sir James Allen said he pre-ferrc-J the method of the adjustments commission for consideration of differences between lender and borrower to that of compulsion. He hoped the Government would not oppose the amendment with respect to trade mortgages proposed by Sir Francis Bell.

The Hon. G. Witty said the Bill demonstrated another case of the thrifty being asked to provide for the thriftless. The Hon. J. A. Hanan said the policy they were endeavouring to establish under the Bill was unprecedented in the country's history. He hoped individuals would ba prepared to honour their obligations just as the nation should be prepared to honour its obligations. Amendment Rejected. The Council went into Committee on the Bill at 12.45 p.m. • Sir Francis Bell moved the deletion of

the clause extending the provisions of ths principal Act to all mortgages. Sir James Parr said he could not possibly accept the amendment, the passing of which would destroy the Bill. The amendment was rejected and the clause passed by 20 votes to 7. The Hons. Bell, Allen, Rhodes, Carrington, Collins, McCallum and Witty voted against the clause. Sir Francis Bell moved an amendment with the object of excluding trade mortgages from the operation of the Bill. This was defeated by 16 votes to 11. Sir Francis Bell then moved a further amendment to deprive a Magistrate of the right to send a mortgagor to gaol for debt. This was accepted by the Leader of the Council and adopted. The amendments made by the Statutes Revision Committee were read into the Bill which was then reported to the Council. The third reading was carried by 21 votes to 7, the noes being the Hons. Allen, Bell, Carrington, Collins, McCallum, Moore and Rhodes. The Bill was passed and the Council rose at 1.40. When the Council resumed at 5.55 p.m. the Hon. Sir James Parr moved that the report of the Committee of Managers should be adopted. He said the effect of the agreement was that the council’s wishes hud been acceded to. The agreement was a happy solution of the difficulty and reflected credit on the Council. The report was agreed to and the Council rose at 7.5 pan. till April 5. HOUSE OF REPRESENTATIVES AMENDMENT RE-ENACTED. GOVERNMENT’S NARROW MARGIN. (From Our Parliamentary Reporter.) Wellington, March 24. The sitting of the House of Representatives proved very erratic to-day, several interruptions taking place before any business was done. The House met as usual at 2.30, but adjourned again after the formal opening business had been transacted owing to the non-appearance of (he message from the Legislative Council. The sitting was resumed after three o’clock when the message from the Council acquainting the House of the fact that the Mortgagors and Tenants’ Relief Bill had been passed with amendments, was received. Mr Speaker called the attention of the House to the fact that the provisions of the main act applied to the Crown and consequently the Council was not in order in inserting the amendments. The Prime Minister moved that the amendments be disagreed to with the exception of purely machinery amendments and the last clause. He was proceeding to outline the amendment when Mr D. G. Sullivan (L., Avon) asked if the House was in order. If the Council had violated the right and privilege of the House by amending the bill, was not the House also committing a breach by considering those amendments? Mr Speaker said he understood the House would appoint managers to confer with the managers from the Council with a view to coming to some agreement and the amendments could be discussed by way of instruction to the managers. The only other thing the House could do was to move a motion ruling the Council out of order and he did not think the House would desire to do that. Mr Forbes then went on to outline the amendments which are dealt with in the report of the Council. The Leader of the Opposition asked if the managers would have power to agree to the amendments. He was of the opinion that they should not do so and considered that Mr Speaker should rule them out of order. If they did, the House should not surrender any of its rights or privileges. Messrs G. W. Forbes, J. G. Coates and W. E. Barnard were appointed managers and the House again adjourned. The Council then met and appointed Sir James Parr, Sir Francis Bell and the Hon. R. Masters managers to confer with the representatives from the House. Message Agreed To. When ('he House resumed, a message from the Governor-General agreeing to the decision of the managers was received and (he question of interference with the rights of the Crown were thus overcome. The message was agreed to after considerable discussion. In reply to a question from the Leader of the Opposition, the Prime Minister said the amendments had been agreed to ny the managers with the exception cf the anicn-l-ment to strike cut sub-clause B in Ci: u-e Five. The amendments agreed to were machinery ones. The clause to be dropped had proposed to give the Court [lower to determine the personal covenant, but i.s abolition would leave the Court with power to postpone only. If the necessity arose, further legislation could be brought down to deal with the position. It would be a re-enacting clause. Mr R. Semple (L., Wellington East) : It would be just as well to strike out the whole clause. Mr Forbes: Oh no. The power to postpone remains. Mr W. Nash (Labour): It will be perpetually hanging over the mortgagors' head. Mr H. T. Armstrong (L., Christchurch East) said that if the House agreed to the proposed amendments, they would form No Man’s Land and the mortgagor would be placed in a most unfortunate position. Mr Barnard said that he did not think the amendment would materially affect the Bill because the sub-section would not have been used in any case. Mr J. McCombs (L., Lyttelton) said he could only agree to that arrangement in the assumption that the Bill was to be a dead letter. He would suggest that an amendment should be moved to the effect that the House agreed to the decision of the managers with the exception of the amendment to clause five. Mr H. E. Holland later moved this amendment and the House divided on it. There were very few members in tho House at the time and the Government had some anxious moments while bells were ringing. The Government whips finally rounded up one -more member than Labour could raise and the amendment was reenacted by 13 votes to 12. The report of the managers was then agreed to and the House rose at seven o'clock, the adjournment being taken until 2.30 p.m. on Tuesday, April 5.