MORTGAGORS’ RELIEF

Southland Times, Issue 22240, 3 February 1934, Page 6

MORTGAGORS’ RELIEF

SCOPE OF SECTION 16. MINISTER’S EXPLANATION. (Per United Press Association.) Wellington, February 2. An interpretation of the scope of Section 16 of the Mortgagors’ and Tenants’ Relief Act was passed last session, about which there has been some confusion. It was given by the Minister of Justice, the Hon. J. G. Cobbe, to-day that the particular provision of the Act provides for the limitation of the rights of creditors while an application for relief is pending, or an order for relief or a pooling scheme is in force. An Auckland message published today summarized the complaint made to the local Chamber of Commerce that Section 16 was too far-reaching in its effect and should be modified. Mr Cobbe remarked that the position might be summed up by saying that experience had shown that if the legislation was to be effective there must be some protection for the mortgagor debtor from his unsecured creditors, as well as from his secured creditors, but that the unsecured creditor was not at all likely to be unduly prejudiced, for it was to be assumed that in all proper cases, the Court would give him leave to enforce any judgment he might obtain against his debtor. There was no restriction on the right of an unsecured creditor to sue for and obtain judgment for the amount of his debt, nor was there any restriction on his right to enforce judgment for an amount not exceeding £2O. It was unlikely, however, that the Court would, in any case, allow an unsecured creditor to file a bankruptcy petition against the mortgagor, while protecting the mortgagor from a similar proceeding by the mortgagee.