STRONG ATTACK

Timaru Herald, Volume CXXXIX, Issue 20074, 3 April 1935, Page 11

STRONG ATTACK

RURAL MORTGAGORS BILL STIR IN COUNCIL By Telegraph—Press Association WELLINGTON, April 2. Contending that there was no urgency for the passing of the Rural Mortgagors Final Adjustment Bill as farmers were already protected by the mortgagors relief legislation which would not expire till December next, the Rt. Hon. Sir Francis Bell strongly attacked the measure in the Legislative Council this afternoon. Sir Francis, who examined the proposals in detail, said the Bill was novel not merely in form but novel as affecting injuriously principles which, in his life in the Legislature and in his private life, he had been taught to respect. He severely criticised the clause providing for the payment of compensation to the mortgagor, and pointed out that the stock mortgagee was not called upon to bear his share of the cost. In that respect, he submitted, the Bill would not tend to bring about voluntary settlements between mortgagor mortgagee, but would rather induce the farmer to decline to enter into such agreements. He also expressed the opinion that if the Bill were passed it would not be long before urban mortgages would be brought under its purview, and in suggesting that the debate should be adjourned till next session, he said that that would give the country a full opportunity of considering the measure. The Hon. H. A. Russell moved the adjournment of the debate till next session. The efFect of the amendment, if carried, would have been to kill the Bill, but it was lost on the voices. Ample Protection at Present. Sir Francis Bell said he desired to impress upon the Council the fact that the Council should not pass the Bill unless it were proved to be urgent. It was not urgent. Every farmer was protected by the relief legislation of 1931, and that legislation remained in force till December of this year. Accordingly, it was not reasonable to say that the non-passing of the Bill would have any injurious effect on the situation of farmers. It would, however, hasten the initiation of a new and entirely novel interference with investments and investors so material that those persons affected were entitled to have full consideration of the change from the present legislation. The proposal that a mortgagor should be entitled to be paid something in the end was initiated by the Government only within the last 10 days. The previous proposal w r as that a mortgagor at the end of a period was to have part of the ultimate value of the property appropriated to him as his equity. For some reason well known that was abandoned and a proposal like this was initiated, presented to the House of Representatives and presented to the Legislative Council on Saturday. He considered it was his duty that unless there was urgency in the matter to take the view that there should be a fuller opportunity of considering the proposal than that accorded by the House of representatives and that proposed by the Council itself. He trusted that some member of the Council would move the adjournment of the debate with the idea of throwing the matter into the latter part of the year. If that were done, the country would have an opportunity of considering it fully as well as members of the House and members of the Council. He did not think that the Council should say that they rejected the Bill or accepted it. They should take up the attitude that it was desirous that the country should have a full opportunity of considering it. He wanted to show that the Bill was entirely novel, not merely in form and in the ordinary sense of new law, but novel as affecting injuriously * principles which, through his long years in the Legislature and in his private life, he had been taught to respect. The Bill would have the effect of preventing voluntary agreements and not effecting them as it was stated it should. What farmers would enter into voluntary agreements when they could have an indemnity for five years with living expenses for them selves and their families, in addition to being allowed working expenses? If a farmer consented to a voluntary arrangement he would deprive himself of that provision. For that reason the Bill in lieu of the promotion of voluntary agreements offered every inducement to farmers to decline. Then again the mortgagee was debarred from coming to a decision that a voluntary agreement should be made. A vote representative of three-fourths of the creditors could make a voluntary agreement and the mortgagee was not to be even considered. The Government had deprived the mortgagee from exercising his individual right and influence though it conferred an individual right on the mortgagor. The Hon. R. Masters: There is an appeal to the Court. A Grave Precedent Sir Francis Bell contended that the Bill would be framed so as to overcome the difficulty. Nobody had heard of such a proposal before, and a man’s rights had never before been dealt with without letting him have a say. Excluding the Judge, the other two members of the Court were to be appointed by the Government. Surely the Legislature could consider a more impartial Court than that. It had been desired that the Judge should be a party to the decisions so that two men not so qualified could not overrule him, but the Minister had insisted that the two men should have the right to overrule the person in the chair. The Bill was so grave a departure from the ordinary principles which had hitherto ruled on the relations of debtor and creditor that it appeared extraordinary that the Government should expect it to pass. It would create a precedent and so grave a precedent that every member of the Council should have the opportunity of deliberating on it. The Bill was limited to farm mortgages, executed before 1931, but what was the experience of the past? The first Mortgagors Relief Act was limited, but later other mortgages were brought in. The provisions of the Bill would have to apply to all mortgages. and the 27.000 mortgagors under the advances to workers schemes would claim the same rights as farmers. Dealing with the clause relating to compensation for the mortgagor, Sir Francis Bell said that the mortgagee of the stock who had had the full benefit from the grazing of his stock on the land had no share in the payment of compensation. The whole plan of the Bill disregarded entirely the interests of the mortgagee of the land and it omitted to place any liability on the mortgagee of the stock. He submitted that the legislation should not be accepted just because the Government willed it. particularly in view of the fact that within a brief period both branches of the legislature could have an opportunity of freely discussing the proposals. Adjournment Moved The Hon. H. A. Russell moved the adjournment of the debate till the next session. He said there had been a

divergence of opinion on the Bill in the House, and it had been handed to members of the Council only that day. It was an important measure and in a different class from other Bills. Mr Masters: You can talk on it for a week.

Mr Bussell said that the Bill would alter the whole of the outlook of investors.

The Hon. Sir James Allen said that copies of the Bill were available only shortly before the Council met, and there had not been time to read it. Mr Masters: It can go on.

Sir James Allen: “We can go on, the Prime Minister can go on, and he has gone on. In a few days the Minister who was responsible for the Bill will have gone on.” He said It was wise to take a little more time before considering such an Important measure. No harm would be done if the Bill were postponed. The Hon. D. Buddo opposed the adjournment. He said the state of the country demanded that something should be done to ameliorate conditions.

The Hon. J. McLeod said he wondered what was behind the move. In the last few months the country had been expecting something to be done, and it would be a gesture of weakness if the Council carried the amendment. Mr Masters appealed to the Council to realise where the position was leading to. and to have due realisation for their responsibilities. It was not proper that the Council should adjourn a debate at the behest of only two members. Leader’s Protest Answering criticism that there had not been time to study the Bill, MiMasters said that the Bill was introduced into the Council last Friday. Farmers were not asking for the postponement of the Bill. He considered that he should have been advised of the motion of adjourn the debate. The only indication he had had was when Sir James Allen had told him in the lobby that there might be a motion to adjourn, and he (MiMasters) had replied that it would not be accepted. Sir Francis Bell: There was no intention to mislead or deceive you. Mr Masters asked why was it that the Statutes Revision Committee had been allowed to sit for the last three days without any indication of the move. A recommendation might have been made that the Bill should be adjourned. Sir Francis Bell said he had made no secret of his intention to move the adjournment. Mr Masters: Nothing was said to me. Sir Francis Bell: I am sorry, but most members of the Council knew. The Hon. R. McCallum suggested that the motion be withdrawn and any expression of members could be given on the third reading. Motion Withdrawn Mr Russell said he had no wish to be discourteous to Mr Masters. Mr Masters said that he appreciated Mr Russell’s position, and he realised that Mr Russell would not wish to do anything injurious to members of the Council. Mr Russell’s amendment was lost on the voices. Proposed Amendments Amendments to the Rural Mortgage Bill in the Legislative Council are as follows:—■ The court of review is empowered r .o issue general directions to the Adjustment Commissions and not merely lay down principles for the guidance of the Commissions.

A provision is inserted to make the majority decision of the court include the Judge. The notice empowering a mortgagor to obtain an adjustment of his liabilities is amended by .providing that the court and not the Adjustment Commission shall give leave. A clause is added giving the Adjustment Commission power to reimpose on the trustee obligations that the Commission has dispensed with in connection with the arrangements in respect of moneys received by him on account of the mortgagor. Budget of the mortgagor’s income and expenditure is to be submitted by the trustee to the mortgagee as well as the mortgagor. Disbursements made in accordance with the distribution of income for the budgetary period are limited to indebtedness in respect to the mortgagor’s farming operations for 12 months before the commencement of the first budgetary period. It was previously provided that disbursements could be made on account of indebtedness before the commencement of the budgetary period. The words “capital assets” in the clause permitting assets in the hands of the trustee to be realised for the benefit of creditors if the assets are not connected with farming operations have been changed to “property.” In final adjustment of a mortgagor’s liabilities, the expenses incurred by the mortgagor in the production of his income have been widened to include all working expenses and the whole or such portion of his living expenses as the Adjustment Commission thinks proper, and any other expenses that “the Commission thinks proper." In the adjustment of liabilities in accordance with the basic value where there is more than one mortgage, a clause has been added to the effect that the first mortgagee shall be satisfied in full before any amount is appropriated to the second mortgage and so on. In the determination of the value of stock and chattels the mortgagor and the mortgagee have been given permission to call evidence as to the value of the stock and chattels. Priority is also given to the first mortgagee where there is more than one mortgage if moneys are called up. Where there has been a sale in a case where the liabilities have been reduced and the moneys are not paid, the mortgagee is empowered to exercise any powers conferred on him for the enforcement of his rights under the mortgage. If any surplus remains and all the mortgagees had been paid, it is to ,be applied by the court for the benefit of any other creditors, after which any surplus is to be repaid to the mortgagor. Preference is to be given by the court to any subsequent mortgagee over the prior mortgagee where application is made to the court by two or more mortgagees for leave to take over the farm lands of a mortgagor. A clause ha,s been added stating that on payment of compensation to the mortgagor the mortgagor is required to transfer to the mortgagee entitled to take over the property the whole of his estate or interest. If the mortgagor refuses to do so. the court may authorise the registrar to execute an instrument in the name of the mortgagor. In the event of a sale by auction any mortgagee is to be entitled to bid and become the purchaser.