PROPERTY EXCHANGE.

Star (Christchurch), Issue 11671, 11 April 1916, Page 6

PROPERTY EXCHANGE.

CANTERBURY CASE. COMMENTS BY JUDGE. His Honor Air Justice Denniston, in. chambers this miorning, dolivcrod judgment in tho caso W. J. and Hannah Oresswell (Mr Bos wick) v. Bernard. Txillyl Air Gresson appeared for W. H. M'Quarters and Mr Ross for 11. D. Benjaim, who arc interested in the property. His Honor said that in tho originating summons., the applicants asked for the leave of tho Court to exerciso tho power of Bale , contained in an agreement for sale made on February, 1911, between tho applicants and Bernard Tully. The land, the subject of tho agreement, consisted of a farm of 1036 acres and was-sold at £lO 10s an aero, £9OOO of tho purchase money remaining unpaid, being payablo on December 22. 191.5. with interest payable halfyearly. Tho title deeds remained with tho vendors. Since then the land had been six times sold, the last purchaser being W. H. M'Quarters. With one exception (an assignment) each of those transactions had been an instance oi the, as a rule, pernicious system oi exchange" which had been so much in, evidence within the last tew years, which consisted in making terms ana town houses not so much the objectof occupation and settlement, as a, moans of speculation-counters m each transaction for the benefit of the middle men to whom the system was largely due; with results which weio to bo seen in tho records of tho Court M'Quarters was last in .the chai not purchasers, bavins Phased the.land at £l6 16s an acre. All those tiansactions had been effected'with a minimum of cash, which had resulted m what was described in an abortive attempt at an agreement between the applicants and the various purchasers, as the complicated nature of the transactions affecting tho said land and the provisions of the agreements setting forth the same. The claimants desired to have the rest "of their purchase money (£9000) paid. The last instalment of interest—duo on .Juno l£, 1915—was only paid under pressure, just before tho issue of tho summons. The original purchaser had now no interest in the property and M'Quarters was unable to pay or raise the money. The claimants asked for leave to sell and the summons was opposed by M'Quarters. It was argued for him. that tho power of the Court to grant' such leave in the caso of an application for sale or default of payment of .the principal money secured by a mortgage or agreement ougbs not to bo exercised unless the applicant satisfies the Court as to all the points mentioned in tho sub-sec-tion to Section 5 of. the Mortgages Extension Amendment Act, 1915. His Honor,did not accept that proposition. The original Act was passed under special circumstances and to meet special conditions, which might or might not be found to exist. It was intended to.meet tho possibility of a. fall in land values or a difficulty in finding purchasers, or such a disturbance in the money market as /Would make it difficult for mortgagees to raise money except on usurious terms.

To prevent the consequences of this to mortgagors the rights of mortgagees were temporarily interfered with—absolutely in respect of principal moneys, and conditionally in respect of interest. That the Act was exceptional and in a sense provisional was. sliown by. the fact that in the same session, twelve weeks after the date of the Act, an amending Act was passed giving the Governor thj> power by Order-in-Council to suspend the provision of tho original Act for .such period' as he shouuld think fit, or to modify the Act as he should think fit, or to revoke such order; and in tho next session of Parliament the original Act was further amended by repealing the provisions of the Act which, prevented the Court from giving leave to sell on default of payment of the principal, and limiting the duration of the principal Act and its amendments to December 31, 1916. ". The provisions of section 5 of the Act of 1915 did not in any way fetter the discretion of the Court. They laid down certain elements which the Court might take into consideration, and provided l that if, having regard to these and to all other relevant considerations, the Court was of opinion that it was just and' equitable that leave should be granted, leave would be granted accordingly. In considering such applications, he thought the Court Avas entitled to start with the assumption that, prima facie, it was just and equitable that a man should keep his promise and perform his obligation. It lay, he thought, on anyone claiming protection from so doing to show thati one or more of the elements to be considered by the Court could' be so answered as to absolve him wholly or conditionally from that primary obligation. It was time that the Act originally, in form at least, threw the- onus of proof on the mortgagee. But that was inevitable from the character of the Act, which was to suspend for the time being all the rights of a class in favour of another class. The occasion required immediate and general action. But, as he had already pointed out, that condition of things_ had been changed, aud the legislation had been modified accordingly. It had not been thought necessary to* recast the Act and formally throw the onus on the mortgagor claiming an indulgence to show good grounds for his claim. But it had laid down certain elements which, ir\| his Honor's opinion, required, on the part of every mortgagor claiming in effect the benefit of the Actby objecting to leave to sell, proof as to one or more of them, that his objection was just and equitable. His Honor concluded: ''Whether or not I am justified in that view, I am! of opinion that having regard to tho statutory and all other relevant conditions, it is just and equitable that on the present summons leave should bo granted. The conditions which could affect this summons are (a), (b) and (c). The evidence shows that the successive dealings (entirely speculative) in this land, with all the hurdens added to it, have made it practically impossible for the now owner to redeem the obligations to the claimants. He has, it is generally admitted, paid too high a price. The £SOOO of good money which it is said he paid, outside exchange and mortgages, has been swallowed up by the last man or men who passed the propeerty on, and it has, as far as one can judge from the proposed agreement among the parties interested,* gone largely to supply the obligations incurred bv them, and so down the chain. (It would be interesting to know how much had gone iu commissions.) In these circumstances the non-payment of his money is a definite hardship inflicted on the niort* gagee by its continuance. I may add that iu my opinion the. object) of the) Act was to protect transactions by bona fide buyers and and not the gambling speculation which the transactions in this matter disclose. I ought to say that as far as W Quarters is concerned, it doe 3 not appear that his transaction, though one of an exchange, was not for bona fide settlement. The order will be made as prayed." _________________