MORTGAGE BILL

Wanganui Chronicle, Volume 79, Issue 222, 19 September 1936, Page 10

MORTGAGE BILL

AMENDMENTS MADE ( POWERS OF THE COURT GUARANTORS’ POSITION DATE FOR APPLICATIONS [Per Press Association] WELLINGTON, Sept. 18. in the House of Representatives this morning, the following amendments were introduced to the Mortgagors’ and Lessees’ Rehabilitation Bill, by the Hon. W. Nash. The term applicant has been extended to include guarantor as well as mortgagor and lessee. This makes a guarantor an ordinary applicant, who is entitled to adjustment to the same extent as a mortgagor or lessee. This alteration is advisable because the' definition of a mortgagor has been ’ restricted to the person who at pre- 1 sent owns a property as distinct from ’ the person who signed the mortgage ; and then transferred the property. The latter is now included in the de- | finition of guarantor. It is made. clear that if a sub-lessee is in occu- ■ pation he is also covered by the Bill. ! Another amendment makes it clear that a lessee under a lease containing an option to purchase can be dealt with as a mortgagor, only when he has exercised the option, except where the lessee was subject to a I relevant section in the Mortgagors' and Tenants’ Relief Act, 1933. Lessees of the latter class are deemed to have notified their intention to exercise the option, and are therefore mortgagors for the purpose of the Bill. A new sub-clause brings deferred payment licences within the scope of ’ the Bill as agreements for sale and ! purchase. Consequent on the new definition of mortgagor, the owner of equity of redemption in any property is deemed to be the owner of tne property. The new clause has the effect of negativing several decisions by which it has been held that when judgment has been obtained for moneys owing under a mortgage or lease the liability of the debtor no longer arises out of the mortgage or lease, but only out of the judgment. The effect of these divisions was to disentitle debtors to relief, and the position in this respect is now altered accordingly. Decisions of the Court have also declared that a mortgagor is not entitled to relief after a mortgagee has exercised his power to sell. That position is also altered by an amendment to the Bill, which now gives mortgagors the right to obtain relief in the circumstances outlined. ’« a furthed provision that a lessee may apply for relief in respect of h»s lease, notwithstanding the fact that the lease may have been determined or may have expired. In order to avoid the possibility of hardship to any party to proceedings bflor® the Adjustment Commission, an additional seven days has been added to the time allowed for the lodging of an appeal to the Court of Review against the decisions of the Commission. Guarantors have been included in the definition of the term applicant in the Bill, which now enables a guarantor to make application for the same adjustment that can be granted to mortgagors and lessees. Application Date Extended. Or.? of the most important amendments is that extending the final date by which applications for adjustment must be lodged from December 31 this year to January 31 next year. A sub-clause in the original Bill dealt with the requirements imposed on a mortgagor or lessee, on whom a copy of an application had been served, and it provided that a mortgage or lease would automatically cease to be subject to legislation if a mortgagor or lessee failed to file the statements required by the Adjustment Commission within a specified period of 21 days. Commissions are now given discretion to order ■whether or not a mortgage or lease should cease to be covered by legislation. Attention has been paid in the amendments to the possibility that, although a mortgagor may take no interest whatever in the adjustment of his liabilities, some other creditor, such as a second mortgage, may be vitally concerned to have the matter dealt with by the Adjustment Commission. Under the new sub-clause the Commission may, in such cases, proceed with the adjustment, and in the exercise of its powers, including Its power to sell the property of the ■mortgagor to any of the mortgagees or creditors. Another amendment makes it clear that, although the personal liability for moneys owing under the mortgage is discharged, the mortgagee does not thereby lose any of the rights against the land itself. The Commission is now enabled to raise moneys for any purpose that would increase the value of an applicant’s farm lands. An important provision is made regarding the personal covenant. If a mortgagee does not serve the guarantor (who includes a mortgagor who is ST —ZZT7

not now the owner of the property) before December 31, 1936, with notice that he holds him liable as guarantor and stating that the guarantor can make application for adjustment not later than January 31, 1937, the liability of the guarantor is entirely discharged. If a mortgagor does not serve this notice the guarantor is liable under the guarantee, and unless he applies before January 31, 1937, for an adjustment of his liabilities he will lose the protection of any relief legislation. Discharge of the guarantor does not affect the mortgagee's rights against any land secured in his mortgage. The amendment extends the last date on which application for relief . can be made from December 31, 1936, to January . 31. the Court of Review having power to extend the date still . further to February 28. A new clause protects the mortgagor lessee and and guarantor from ' action by a rating authority to sell or lease property for arrears of rates, and protection is extended to a mortgagee or lessor for a period until January ’ 31, 1937. or the finish of the adjust- ; ment. ’ Applicants to the Court are still re- . strained from disposing of property or ’ of obtaining credit without disclosing the fact that they are applicants, but 1 an additional offence is provided if he does not fulfil his obligation, and he will be liable unde” the Chattels ’ Transfer Act, 1924. Orders on Milk Cheques. The Commission will now have ' power to cancel or vary orders on milk cheques and similar assignments i executed before or after the passing ■ of the Art. Where a property, which : has been subject to adjustment, is • i occupied by a tenant who is a lessee I jof the mortgagee in possession, the; 5 ! Court is empowered to order posses- - sion to be given to the mortgagee. 1 'The tenant will retain any protection ’ I he has under the Fair Rents Act. ' I Many applications have already been made for the revaluation of ■'rural Crown lands, and the Bill has •been amended to provide that such 1 : applications for revaluation shall be l |deemed to be applications under the ’ Bill. A provision has been embodied -! restricting th? sale of land in re- * ; spert of which adjustment has been made, and. without special leave of ’the Court, no sale may be made before January 1. 1941. In granting . i leave to sell a property, the Court > may require the mortgagor to pay t into Court such portion of the sale L I price as th? Court thinks equitable, ’having specially in view the improvei ments made to the land since the j date of adjustment, and this money is j to go to the creditors. 1 The previous legislation omitted to ' embrace family protection, where the ; terms of deed, etc., were modified on f the grounds that there was hardship ? to the person making payment. The Bill extends the date under which this provision operated to March 31, c 1937, and brings these orders into r line with similar orders. a The Court is given power to vary pooling agreements made before the 1933 Act still in existence, in the same way as it can vary orders. The Court is also empowered to vary orders made under the 1933 Act. A new provision is included by which a trustee or provisional trustee appointed under the 1935-3-7 Act is retained in office. r Opposition Views. ;, The Rl. Hon. J. G. Coates took cxi ccption to the policy or the Govern- ? ment in making caanges in various ? bodies in order to favour its triends, s He urged in lhe interests of sound administration that there should be r no interference with the Mortgage 1 Adjustment Committees. - Mr, Nash said that the whole test ‘ was competence, and there would be 1 no changes except on those grounds. J he Government must have tne rignt 1 to control those appointments. A division was called on the subclause providing that members of the Court would vacate office on tne passing of tne Bill. Mr. Coates moved to have the sub-clause deieted but it was, retained by 41 voles to 2 13I Mr. W. J. Polson moved an amend- ’ ment to delete the clause which ■ abolished the Mortgage Adjustment j Commissions. The luncheon adjournment was I then taken. (The message is published as received, but apparently some mistake ' has been made in the wording in the • text reading' "If a mortgagee does I not serve this notice the guarantor ; is liable under the guarantee, and unless he applies before January 31, : 1937, for an adjustment of his ■ liabilities he will lose the protection I of any relief legislation '') The debate was continued ” lien the I House resumed at 2.30 pm. t Mr Polson's amendment abolishing i mortgage adjustment commissions ’was defeated by 36 votes to 14. Coming to the clause dealing with | the basic values of farm lands. Mr Polson moved an amendment with the •object »»i providing u sinking fund not exceeding one pei vent to give the rarmei an equii) in his land Aiici c.u»rne discu-..non the amend iiirfit WaS lust Oil the VUKeS. | The Er. Hon. J. G. Coates (Opp., Kaipara) moved an amendment to Clause 41 so that an adjustment commission may. with the consent of the mortgagee and the mortgagor, subdivide and sell any portion of the

mortgaged land on conditions which it may determine. The amendment was lost by 32 votes to 12. Mi* W. A. Bodkin (Opp., Central Otago) moved a further amendment to provide that, with the sent of the mortgagee, the mortgagor may borrow any part of the sum to be repaid. The amendment was lost by 36 votes to 12. Progress was reported when Clause 47 was under consideration and the House rose at 5.30 p.m. LEGISLATIVE COUNCIL FISHERIES AND LAW REFORM BILLS i BOTH MEASURES PASSED CLAUSE DELETED FROM LAW BILL (Per Press Association] WELLINGTON, Sept. 18. The Legislative Council met at 2.30 ; p.m. The Auckland City Abattoir Bill ’ and the Nelson Waterworks Extension Amendment Bill were read a first 1 Lime and referred to a select com- ’ mittee. ’ The Council refused to suspend the Standing Orders so as to allow the Nelson Diocesan Trust Board Empowering Bill to proceed. The Speaker, the Hon Sir Walter Carncross, pointed out that a Judge’s certificate should be obtained, and 11 the Standing Orders were suspended in this respect the Supreme Court would be flouted The Fisheries Bill and the Law Reform Bill were passed. fhe Statutes Revision Conimillee, Itn which the Law Reform Bill was i referred, deleted the ciause providing that covenants in leases are not to assign without license or consent It the lease is for more than forty years and was made in consideration of building improvements under certain ■ conditions. The Council adjourned at 4 p.m. till Wednesday.