Property Law Amendment Act 1993
Property Law Amendment Act 1993
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Property Law Amendment Act 1993
Public Act |
1993 No 123 |
|
Date of assent |
28 September 1993 |
|
Contents
An Act to amend the Property Law Act 1952
BE IT ENACTED by the Parliament of New Zealand as follows:
1 Short Title and commencement
(1)
This Act may be cited as the Property Law Amendment Act 1993, and shall be read together with and deemed part of the Property Law Act 1952 (hereinafter referred to as the principal Act).
(2)
Except as provided in subsection (3) of this section, this Act shall come into force on the 28th day after the date on which it receives the Royal Assent.
(3)
Sections 2, and 4 to 6 of this Act shall come into force on the 1st day of July 1994.
2 Deed by corporation
Section 5 of the principal Act is hereby amended by adding the following subsection:
“(5)
Nothing in subsection (1)(a) of this section applies to a company within the meaning of the Companies Act 1993.”
3 Restriction on exercise of mortgagee’s rights
Section 92 of the principal Act is hereby amended by inserting, after subsection (1), the following subsection:
“(1a)
For the purposes of subsection (1) of this section, the entering into of a contract to sell or the granting of an option to purchase land shall not be regarded as the exercise of a power of sale if the contract or option is conditional (either solely or together with other conditions) on the failure by the owner to remedy a default specified in a notice under that subsection served either before or after the contract is entered into or the option is granted, as the case may be.”
4 New heading and sections inserted
The principal Act is hereby amended by inserting, after section 103, the following heading and sections:
“Exercise of Power of Sale
“103a Duty of mortgagee exercising power of sale
A mortgagee who exercises a power of sale of land or other mortgaged property, including exercise of a power of sale through the Registrar of the High Court under section 99 of this Act, owes a duty to the mortgagor to take reasonable care to obtain the best price reasonably obtainable as at the time of sale.
“103b No defence or indemnity
Notwithstanding any enactment or rule of law or anything contained in the deed or instrument by or under which the power of sale is conferred,—
“(a)
It is not a defence to proceedings against a mortgagee for a breach of the duty imposed by section 103a of this Act that the mortgagee was acting as the mortgagor’s agent or under a power of attorney from the mortgagor:
“(b)
A mortgagee is not entitled to compensation or indemnity from the mortgaged property or the mortgagor in respect of any liability incurred by the mortgagee arising from a breach of the duty imposed by section 103a of this Act.”
5 New Part VIIa inserted
The principal Act is hereby amended by inserting, after Part VII, the following Part:
“Part VIIa “Special Provisions Applying to Mortgagees in Possession of or Receiving Income from Mortgaged Property
“104bb Application
“(1)
This Part of this Act applies—
“(a)
To a person who becomes a mortgagee in possession, whether personally or by an agent, of mortgaged property after the coming into force of this Part of this Act:
“(b)
A mortgagee who, whether personally or by an agent, first receives income from mortgaged property after the coming into force of this Part of this Act:
“(c)
Subject to subsections (3) to (6) of this section,—
“(i)
To a person who is a mortgagee in possession, whether personally or by an agent, of mortgaged property and who became a mortgagee in possession of the property before the coming into force of this Part of this Act:
“(ii)
To a mortgagee receiving, whether personally or by an agent, income from mortgaged property and who received income from the property before the coming into force of this Part of this Act.
“(2)
For the purposes of subsection (1) of this section, a person is not to be regarded as a mortgagee in possession of mortgaged property or a mortgagee who received income from mortgaged property, as the case may be, by reason only of the fact that the person, whether personally or by an agent, has received income from the mortgaged property other than as the result of the exercise of a right to receive the income on a default under the mortgage.
“(3)
Nothing in section 104dd or section 104ii of this Act applies to a mortgagee referred to in subsection (1)(c) of this section.
“(4)
Nothing in paragraph (a) of subsection (1) of section 104jj of this Act requires a mortgagee referred to in subsection (1)(c) of this section to prepare a report in relation to a period of 6 months referred to in that paragraph that ends before the coming into force of this Part of this Act.
“(5)
Nothing in paragraph (b) of subsection (1) of section 104jj of this Act requires a mortgagee referred to in subsection (1)(c) of this section who has ceased to be in possession of mortgaged property or to be in receipt of income from mortgaged property before the coming into force of this Part of this Act to prepare a report under that paragraph.
“(6)
Nothing in section 104oo of this Act requires a mortgagee who has ceased to be in possession of mortgaged property or to be in receipt of income from mortgaged property, as the case may be, before the coming into force of this Part of this Act to give a notice under that section.
“104cc Interpretation
“(1)
In this Part of this Act,—
“‘Director’, in relation to—
“(a)
A company within the meaning of section 2 of the Companies Act 1955 or a company within the meaning of section 2 of the Companies Act 1993, as the case may be, includes—
“(i)
Any person occupying the position of director of the company by whatever name called; and
“(ii)
A person in accordance with whose directions or instructions a person referred to in subparagraph (i) of this paragraph may be required or is accustomed to act; and
“(iii)
A person in accordance with whose directions or instructions the board of the company may be required or is accustomed to act:
“(b)
An overseas company, includes an agent, officer, or employee responsible in New Zealand for the business of the overseas company:
“(c)
Any other body corporate, means a person having functions similar to those of a director of a company.
“(2)
In sections 104dd, 104ll, and 104oo of this Act,—
“Registrar”, in relation to—
“(a)
A company, has the same meaning as in section 2 of the Companies Act 1955 or section 2 of the Companies Act 1993, as the case may be:
“(b)
A society registered under the Industrial and Provident Societies Act 1908, means the Registrar of Industrial and Provident Societies:
“(c)
A society registered under the Incorporated Societies Act 1908, means the Registrar of Incorporated Societies:
“(d)
A friendly society or a credit union registered under the Friendly Societies and Credit Unions Act 1982, means the Registrar of Friendly Societies and Credit Unions:
“(e)
Any other body corporate registered under any enactment, means any person discharging the powers, functions, and duties of a registrar under that enactment.
“104dd Notice of entry into possession of, or receipt of income from, mortgaged property
“(1)
A mortgagee to whom this Part of this Act applies must—
“(a)
Forthwith after entering, whether personally or by an agent, into possession of mortgaged property; or
“(b)
Forthwith after receiving, whether personally or by an agent, income from mortgaged property—
give written notice of the fact to the mortgagor and also give public notice of the fact.
“(2)
A notice given under subsection (1) of this section must include—
“(a)
The mortgagee’s full name:
“(b)
The date on which the mortgagee entered into possession of the mortgaged property or first received income from the mortgaged property, as the case may be:
“(c)
The address of the registered office of the mortgagee, if the mortgagee is a body corporate, or the address of the residence of the mortgagee if the mortgagee is an individual, or an address specified by the mortgagee as an address to which communications relating to the mortgaged property may be sent:
“(d)
A brief description of the mortgaged property.
“(3)
If the mortgagor is a body corporate, the mortgagee must send a copy of the public notice to the Registrar within 7 days after the date on which the mortgagee enters into possession of the mortgaged property or first receives income from the mortgaged property, as the case may be.
“(4)
If a mortgagee fails to comply with this section, the mortgagee and, if the mortgagee is a body corporate, every director of the mortgagee, commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
“104ee Public notice
“(1)
Where, pursuant to section 104dd(1) of this Act, public notice must be given in relation to mortgaged property in any case where the mortgagor is not an overseas company, that notice must be given by publishing it—
“(a)
In at least 1 issue of the Gazette; and
“(b)
In at least 1 issue of a newspaper circulating in the following areas in New Zealand:
“(i)
The area in which the mortgaged property is situated; and
“(ii)
The area in which is situated—
“(A)
The mortgagor’s place of business; or
“(B)
If the mortgagor has more than 1 place of business, the mortgagor’s principal place of business; or
“(C)
If the mortgagor has no place of business or neither the mortgagor’s place of business nor principal place of business is known, the mortgagor’s registered office, in the case of a body corporate, or the residence of the mortgagor, in the case of an individual.
“(2)
Where, pursuant to section 104dd(1) of this Act, public notice must be given in relation to mortgaged property in any case where the mortgagor is an overseas company, that notice must be given by publishing it—
“(a)
In at least 1 issue of the Gazette; and
“(b)
In at least 1 issue of a newspaper circulating in the following areas in New Zealand:
“(i)
The area in which the mortgaged property is situated; and
“(ii)
The area in which is situated—
“(A)
The mortgagor’s place of business; or
“(B)
If the mortgagor has more than 1 place of business, the principal place of business of the mortgagor.
“104ff Mortgagor to make information available to mortgagee
“(1)
A mortgagor, and, in the case of a mortgagor that is a body corporate, every director of the mortgagor must—
“(a)
Make available to a mortgagee to whom this Part of this Act applies all books, documents, and information relating to the mortgaged property in the possession or under the control of the mortgagor:
“(b)
If required to do so by the mortgagee, verify by statutory declaration that the books, documents, and information are complete and correct:
“(c)
Give the mortgagee such assistance as the mortgagee may reasonably require:
“(d)
If the mortgagor is a body corporate that has a common seal, make the common seal available for use by the mortgagee.
“(2)
On the application of a mortgagee to whom this Part of this Act applies, the Court may make an order requiring the mortgagor or, if the mortgagor is a body corporate, any director of the mortgagor to comply with subsection (1) of this section.
“104gg Accounting records
“(1)
A mortgagee to whom this Part of this Act applies must at all times keep accounting records that correctly record and explain the receipts, expenditure, and other transactions relating to the mortgaged property.
“(2)
The accounting records must be retained for not less than 6 years after the mortgagee has ceased to be in possession of the mortgaged property or has ceased to receive the income from it, as the case may be.
“104hh Duty in relation to money
“(1)
A mortgagee must keep money relating to the mortgaged property separate from other money held by or under the control of the mortgagee.
“(2)
Nothing in subsection (1) of this section prevents a mortgagee from applying money relating to mortgaged property towards repayment of amounts owing under the mortgage.
“104ii First report by mortgagee
“(1)
Not later than 2 months after entering into possession of mortgaged property or first receiving income from mortgaged property, as the case may be, a mortgagee to whom this Part of this Act applies must prepare a report in relation to the property, including—
“(a)
Particulars of the mortgaged property:
“(b)
Particulars of the debts and liabilities to be satisfied from the mortgaged property:
“(c)
The names and addresses of the creditors with an interest in the mortgaged property:
“(d)
Particulars of any other mortgage or encumbrance over the mortgaged property held by any creditor (including the date on which it was created):
“(e)
Particulars of any default by the mortgagor in making relevant information available:
“(f)
Such other information as may be prescribed.
“(2)
The report must also include details of—
“(a)
The events leading up to and giving rise to the right of the mortgagee to enter into possession of the mortgaged property or to receive the income from it, as the case may be, so far as the mortgagee is aware of them:
“(b)
Any proposal to dispose of the mortgaged property:
“(c)
Any amounts likely to be available for payment to other creditors of the mortgagor.
“(3)
A mortgagee may omit from the report details of any proposals for disposed of the mortgaged property if the mortgagee considers that their inclusion would materially prejudice the exercise of the mortgagee’s rights or powers.
“(4)
If a mortgagee fails to comply with this section, the mortgagee, and, if the mortgagee is a body corporate, every director of the mortgagee, commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
“104jj Further reports by mortgagee
“(1)
Not later than 2 months after—
“(a)
The end of each period of 6 months after a mortgagee to whom this Part of this Act applies entered into possession of mortgaged property or first received income from mortgaged property, as the case may be; and
“(b)
The date on which a person who was a mortgagee to whom this Part of this Act applied ceased to be in possession of the mortgaged property or the income from it, as the case may be,—
the mortgagee or person, as the case may be, must prepare a further report summarising the state of affairs with respect to the mortgaged property, including all amounts received and paid during the period to which the report relates.
“(2)
The report must also include details of—
“(a)
Property disposed of since the date of any previous report and any proposals for disposal of mortgaged property; and
“(b)
Any amounts likely to be available for payment to other creditors of the mortgagor.
“(3)
A mortgagee may omit from the report required to be prepared in accordance with subsection (1)(a) of this section details of any proposals for disposal of the mortgaged property if the mortgagee considers that their inclusion would materially prejudice the exercise of the mortgagee’s rights or powers.
“(4)
Where a person fails to comply with this section, that person and, if that person is a body corporate, every director of the body corporate, commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
“104kk Extension of time for preparing reports
A period of time within which a person must prepare a report referred to in section 104ii or section 104jj of this Act may, on the application of that person, be extended by the Registrar.
“104ll Persons entitled to receive reports
“(1)
A copy of every report prepared under section 104ii and section 104jj of this Act must be sent by the person required to prepare it to the mortgagor.
“(2)
The copy of the report must be sent to the mortgagor—
“(a)
At the address of the mortgagor’s place of business; or
“(b)
If the mortgagor has more than 1 place of business, at the address of the mortgagor’s principal place of business; or
“(c)
If the mortgagor has no place of business or neither the mortgagor’s place of business nor principal place of business is known, at the address of the mortgagor’s registered office, in the case of a body corporate, or the last known residence of the mortgagor, in the case of an individual.
“(3)
Not later than 21 days after receiving a written request for a copy of a report prepared under section 104ii or section 104jj of this Act from—
“(a)
A creditor, director, or surety of the mortgagor; or
“(b)
Any other person with an interest in any of the mortgaged property; or
“(c)
The authorised agent of any of them—
and on payment of the reasonable costs of making and sending the copy, the person who prepared the report must send a copy of the report to the person requesting it.
“(4)
Within 7 days after preparing a report under section 104ii or section 104jj of this Act in relation to a grantor that is a body corporate, the person who prepared the report must send or deliver a copy of the report to the Registrar.
“(5)
Where a person fails to comply with this section, that person and, if that person is a body corporate, every director of the body corporate commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
“104mm Persons entitled to inspect reports
A person to whom a report must be sent in accordance with section 104ll of this Act is entitled to inspect the report during normal business hours at—
“(a)
The address of the registered office, residence, or other address of the person required to send it specified under section 104dd(2)(c) of this Act; or
“(b)
Any other place of business of the person required to send it at any time after the expiration of 7 days after requesting the report to be made available for inspection at that place.
“104nn Duty to notify breaches of other Acts
“(1)
A mortgagee to whom this Part of this Act applies of a mortgagor that is a company and that considers that the mortgagor or any director of the mortgagor has committed an offence against the Companies Act 1955 or the Securities Act 1978 or the Companies Act 1993 must report that fact to the Registrar.
“(2)
If a mortgagee fails to comply with subsection (1) of this section, the mortgagee and, if the mortgagee is a body corporate, every director of the mortgagee commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
“104oo Notice that mortgagee no longer in possession of, or receiving income from, mortgaged property
“(1)
Where a person ceases to be a mortgagee to which this Part of this Act applies of a mortgagor that is a company by reason of any act or decision on the part of that person as mortgagee, that person must, not later than 7 days after so ceasing, deliver to the Registrar notice in writing of the fact that the person has ceased to be in possession of the mortgaged property or has ceased to receive income from it, as the case may be.
“(2)
Where a person fails to comply with subsection (1) of this section, that person and, if that person is a body corporate, every director of the body corporate commits an offence and is liable on summary conviction to a fine not exceeding $10,000.
“104pp Court may terminate or limit exercise of mortgagee’s powers
“(1)
The Court may, on the application of a person referred to in subsection (2) of this section,—
“(a)
Order that a mortgagee in possession—
“(i)
Must cease to exercise that person’s powers as a mortgagee in possession as from a specified date; or
“(ii)
Must, as from a specified date, exercise that person’s powers as a mortgagee in possession only in respect of specified property; or
“(b)
Order that a mortgagee who is receiving the income from any mortgaged property—
“(i)
Must cease to receive the income as from a specified date; or
“(ii)
Must cease to receive the income from specified mortgaged property as from a specified date.
“(2)
Any of the following persons may apply to the Court under subsection (1) of this section:
“(a)
The mortgagor:
“(b)
If the mortgagor is a company, a liquidator:
“(c)
If the mortgagor is a person who has been adjudged bankrupt, the Official Assignee of the estate of the mortgagor.
“(3)
An order may be made under subsection (1) of this section only if the Court is satisfied that—
“(a)
The purpose of entering into possession of the mortgaged property has been satisfied; or
“(b)
Circumstances no longer Justify the mortgagee remaining in possession of the mortgaged property or continuing to receive the income from it, as the case may be.
“(4)
Unless the Court orders otherwise, a copy of an application under this section must be served on the mortgagee not less than 7 days before the hearing, and the mortgagee may appear and be heard at the hearing.
“(5)
An order under subsection (1) of this section may be made on such terms and conditions as the Court thinks fit.
“(6)
An order under this section does not affect any other mortgage, security, or charge over the mortgaged property.
“(7)
The Court may, on the application of any person who applied for or is affected by the order, rescind or amend an order made under this section.
Compare: 1955, No. 63, s. 346a; 1980, No. 43, s. 41
“104qq Defences available to directors in proceedings for offences under this Part
It is a defence to a director of any body corporate who is charged with an offence under this Part of this Act if he or she proves that—
“(a)
The body corporate took all reasonable and proper steps to ensure that the relevant requirement of this Part of this Act was complied with; or
“(b)
He or she took all reasonable steps to ensure that the body corporate complied with the relevant requirement of this Part of this Act; or
“(c)
In the circumstances he or she could not reasonably have been expected to take steps to ensure that the body corporate complied with the relevant requirement of this Part of this Act.”
6 New Part XVIa inserted
The principal Act is hereby amended by inserting, after Part XVI, the following Part:
“Part XVIa “Debentures Issued by Companies
“151a Interpretation
In this Part of this Act, ‘company’ means—
“(a)
A company within the meaning of section 2 of the Companies Act 1955:
“(b)
A company within the meaning of section 2 of the Companies Act 1993.
“151b Perpetual debentures
Notwithstanding any rule of equity, a condition contained in any debentures or in any deed for securing any debentures, issued or executed by a company, whether before or after the commencement of this section, is not invalid by reason only that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long.
Compare: 1955, No. 63, s. 97
“151c Power to reissue redeemed debentures in certain cases
“(1)
Where either before or after the commencement of this section a company has redeemed any debentures previously issued, then,—
“(a)
Unless any provision to the contrary, whether express or implied, is contained in the case of a company within the meaning of section 2 of the Companies Act 1955, in the articles of the company, or in the case of a company within the meaning of section 2 of the Companies Act 1993, in the constitution of the company, as the case may be, or in any contract entered into by the company; or
“(b)
Unless the company has, by passing a resolution to that effect or by some other act, manifested its intention that the debentures shall be cancelled,—
the company shall have, and shall be deemed always to have had, power to reissue the debentures, either by reissuing the same debentures or by issuing other debentures in their place.
“(2)
On a reissue of redeemed debentures the person entitled to the debentures shall have, and shall be deemed always to have had, the same priorities as if the debentures had never been redeemed.
“(3)
Where a company has either before or after the commencement of this Act deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit while the debentures remained so deposited.
“(4)
The reissue of a debenture or the issue of another debenture in its place under this section, whether the reissue or issue was made before or after the commencement of this section, shall be treated as the issue of a new debenture for the purposes of stamp duty, if any, but it shall not be so treated for the purposes of any provision limiting the amount or number of debentures to be issued.
Compare: 1955, No. 63, s. 98
“151d Specific performance of contracts to subscribe for debentures
A contract with a company to take up and pay for any debentures of the company may be enforced by an order for specific performance.
Compare: 1955, No. 63, s. 100”.
This Act is administered in the Department of Justice.
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Property Law Amendment Act 1993
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