National Security (Debtors' Relief) Regulations (Cth)

STATUTORY RULES.

1941. No. 194.

 

REGULATIONS UNDER THE NATIONAL SECURITY ACT 1939-1940.*

I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulations under the National Security Act 1939-1940.

Dated this thirteenth day of August, 1941.

GOWRIE

Governor-General.

By His Excellency’s Command,

W. M. HUGHES

for and on behalf of the Minister of State for Defence Co-ordination.

 

National Security (Debtors’ Relief) Regulations.

Citation.

1. These Regulations may be cited as the National Security (Debtors’ Relief) Regulations.

Administration.

2. These Regulations shall be administered by the Attorney-General.

Repeal.

3.—(1.) The National Security (Debtors’ Relief) Regulations (being Statutory Rules 1940, No. 236) and the Regulations which amend those Regulations (being Statutory Rules 1941, Nos. 19 and 99) are repealed.

(2.) Nothing in these Regulations shall affect the operation of any order of a Court made in pursuance of the Regulations repealed by these Regulations, or of any variation of any such order.

(3.) Any application made under the Regulations repealed by these Regulations and pending at the commencement of these Regulations shall be deemed to have been made in pursuance of these Regulations.

Definitions.

4. In these Regulations, unless the contrary intention appears—

“debt” means a sum of money due or likely within three months to become due from one person resident or carrying on business in Australia to another person resident or carrying on business in Australia, whether the sum is liquidated or unliquidated, secured or unsecured, but does not include—

(a) any liability under a judgment in an action for seduction or breach of promise of marriage, under an affiliation or maintenance order, or under a judgment against the debtor as a respondent or co-respondent (or other like party, by whatever name called) in a matrimonial cause;

* Notified in the Commonwealth Gazette on 13th August, 1941.

4974.—Price 5d.

(b)a liability to pay any penalty (with or without costs) imposed by any court;

(c)a liability to the Crown (whether in right of the Commonwealth or of a State) or to the administration of any Territory of the Commonwealth, on recognizance or bond;

(d)a liability in respect of any tort or breach of trust;

(e)a liability in respect of advances granted by the Commonwealth or a State or the administration of any Territory of the Commonwealth to the debtor from funds provided directly or indirectly by the Commonwealth, State or administration;

(f) a sum due to the Commonwealth or a State or the administration of any Territory of the Commonwealth under any law of the Commonwealth, State or Territory with respect to taxation;

(g)a sum due in respect of municipal or other local rates; or

(h)a liability in respect of which the debtor is receiving relief or protection under any other law of the Commonwealth or under any law of a State or Territory of the Commonwealth, or a sum due under any such law in respect of the adjustment of debts;

“mortgage” means any deed, memorandum of mortgage, instrument or agreement whereby security for payment of moneys or for the performance of any contract is granted over real or personal property or any interest therein, and includes an equitable mortgage and any instrument by which the duration of a mortgage is extended or by which any provision of a mortgage is varied;

“mortgagee” means the person entitled to the benefit of the security of any mortgage;

“mortgagee in possession” includes a mortgagee who has appointed a receiver who is in possession of the mortgaged property;

“mortgagor” includes any person entitled to redeem a mortgage and any person who has guaranteed the payment of money, the payment of which is secured by a mortgage or the performance of any covenant, condition, or agreement expressed or implied in a mortgage, whether the guarantee is expressed in the mortgage or in any other instrument;

“person who has guaranteed the payment of money” includes a person who, to the knowledge of the creditor at the time the liability was incurred, has incurred a primary liability to the creditor to pay money to the creditor as surety for a third person;

“prescribed” means prescribed by these Regulations or by orders made thereunder;

“the Registrar”, in relation to a tribunal, means the Clerk, Registrar, Prothonotary or other principal officer of the tribunal;

“tribunal” means—

(a) in relation to an application which relates to debts not exceeding in the aggregate Five hundred pounds, when the debts were incurred—

(i) in a State (other than the State of Tasmania) or in the Northern Territory or the Australian Capital Territory—a court of limited civil jurisdiction constituted by a Police, Stipendiary or Special Magistrate;

(ii) in the State of Tasmania—a Court of Requests;

(iii) in the Territory of Papua—the Supreme Court of that Territory;

(iv) in the Territory of New Guinea—a District Court in that Territory; or

(v) in Norfolk Island—the Court of Norfolk Island sitting in its Full Jurisdiction;

(b)in relation to an application which relates to debts exceeding in the aggregate Five hundred pounds but not exceeding in the aggregate Two thousand pounds—a District Court, County Court or Local Court of Full Jurisdiction in the State or Territory of the Commonwealth (other than the Territory of New Guinea) in which the debts were incurred, or, if there is no such court, or the debts were incurred in the Territory of New Guinea, the High Court or the Supreme Court of the State or Territory in which the debts were incurred, or, if the debts were incurred in Norfolk Island, the Court of Norfolk Island sitting in its Full Jurisdiction; and

(c)in relation to an application which relates to debts exceeding in the aggregate Two thousand pounds—the High Court, or the Supreme Court of the State or Territory of the Commonwealth in which the debts were incurred or, if the debts were incurred in Norfolk Island, the Court of Norfolk Island sitting in its Full Jurisdiction.

Applications for relief.

5.—(1.) Any debtor who is unable to pay his debts or any of them by reason of circumstances attributable to the war may apply, in accordance with these Regulations, to a tribunal for relief in respect of his debts or any of them.

(2.) An application for relief under these Regulations shall be made in writing to the Registrar of the tribunal and shall be accompanied by a statutory declaration giving full particulars of—

(a) the name, address and occupation of the applicant;

(b)the names and addresses of the applicant’s creditors and the amount owing to each of them;

(c) the assets of the applicant and their value and the extent (if any) to which each such asset is charged;

(d) the assets which the applicant has disposed of since the commencement of these Regulations otherwise than in the ordinary course of his business;

(e) the circumstances by reason of which he is unable to pay his debts or any of them; and

(f) such other particulars as are prescribed,

and shall be accompanied by a true copy of the application, in respect of each creditor to whom it relates, for endorsement and service as prescribed.

(3.) Upon receipt of such an application, the Registrar shall appoint a time for the hearing thereof and shall endorse on the true copies of the application the place and time of hearing and return them to the applicant.

(4.) Upon personal service on a creditor of a true copy so endorsed, and until the application is determined by the tribunal—

(a)no action, execution, process or proceeding, whether judicial or extra-judicial, in respect of the debt owing to that creditor; and

(b) no action, execution, process or proceeding, whether judicial or extra-judicial, on default or for or upon any covenant under or provision in any mortgage or other security or any agreement for the sale or purchase of property under or by which that debt or any portion thereof arises or is acknowledged or is secured,

shall, without leave of the tribunal, be commenced or proceeded with or put in force against the debtor or any property, estate, interest, effects or assets of the debtor:

Provided that nothing in this regulation shall prevent a mortgagee in possession at the date of the commencement of these Regulations from exercising all or any of his rights, powers and remedies under the mortgage.

Power to grant relief.

6.—(1.) An application for relief under the last preceding regulation shall be dealt with after notice to such creditors (if any) of the debtor (other than a creditor on whom a true copy of the application is served) and to such other persons (if any) as the tribunal considers should have notice of the application.

(2.) If, upon hearing any such application, the tribunal is satisfied that—

(a)the applicant is unable to pay any debt in respect of which the application is made;

(b) the inability has arisen by reason of circumstances attributable to the war and is not substantially due to mistakes or defects in the conduct of the applicant’s business affairs; and

(c) it is desirable, in all the circumstances of the case, that relief should be granted under these Regulations to the applicant,

the tribunal may grant such relief on such terms and conditions (if any) as the tribunal thinks fit.

(3.) The tribunal may make all such interlocutory and final orders in the matter of the application, including orders as to costs, as, having regard to the objects of these Regulations and the circumstances of the case, the tribunal considers to be just and equitable.

(4.) The costs of any such application shall be borne by the applicant unless the tribunal otherwise orders.

(5.) Any application under this regulation may be disposed of in chambers.

(6.) In dealing with any application under this regulation, the tribunal may take into consideration the financial position of the debtor and the question whether the granting of the relief applied for or of any relief under these Regulations is likely to inflict hardship on any creditor to whom the application relates.

Nature of relief which may be granted.

7.—(1.) The nature of the relief which may be granted under these Regulations may include—

(a) the postponement for such time not exceeding twelve months as the tribunal thinks fit of the due date of payment of the whole or any specified portion of a debt;

(b)the postponement, for such time not exceeding twelve months as the tribunal thinks fit, of the time for payment of any periodical payment payable under any contract or agreement under which a debt is due or likely to become due;

(c) the fixation of the rate of interest (if any) payable by a debtor upon any debt the due date for payment of which or of any portion of which is postponed, and the time of payment of such interest; and

(d)the postponement for not more than twelve months of the date upon which a creditor may exercise any legal remedy which is available to him by way of—

(i) the levying of distress;

(ii) the taking of possession of any property or the appointment of a receiver of any property;

(iii) re-entry upon any land; or

(iv) the realization of any security or the forfeiture of any deposit or purchase money.

(2.) If in relation to any contract or agreement in respect of which an application is made it appears to the tribunal that the contract or agreement is, so far as the applicant is concerned, unduly onerous by reason of circumstances attributable to the war, the tribunal may order that the terms of the contract or agreement be varied to such extent and for such period, not exceeding twelve months, as the tribunal thinks fit, and any such order shall be of full force and effect, and shall be complied with by the parties to the contract or agreement:

Provided that where the contract or agreement provides for the payment of a specified sum of money by instalments no such order shall have effect to reduce the total amount payable under the contract or agreement.

(3.) If the tribunal orders that the time for payment of any periodical payment be postponed—

(a)the tribunal shall order that the time for payment of each subsequent periodical payment be postponed for such period not exceeding twelve months as the tribunal thinks fit; and

(b)the tribunal may direct that interest on the postponed payments be paid at such rate as it considers reasonable in the circumstances of the case.

(4.) If the tribunal, in pursuance of sub-regulation (2.) of this regulation, orders that the terms of a contract or agreement providing for the payment of a specified sum by instalments be varied to reduce the total amount of the instalments payable under the contract or agreement during any period included in the period specified in the order—

(a)the tribunal may direct that interest be paid at such rate as it considers reasonable in the circumstances of the case on the amount representing the difference between the total amount of the instalments which, but for the order, would be payable under the contract or agreement during the first-mentioned period and the total amount of the instalments so payable under the contract or agreement as varied by the order; and

(b)if the amount or any part of the amount representing that difference or the interest or any part of the interest due on that amount or any part of that amount is, after the expiration of the period specified in the order, unpaid by the debtor, it shall be deemed not to be moneys owing under the contract or agreement but shall constitute a separate debt and be recoverable by the creditor accordingly as if it were moneys lent or interest thereon, as the case may be.

Saving of equity of debtor.

8. Where a debtor has been granted relief under these Regulations in respect of a debt under any contract or agreement under which the debtor claims an equitable interest in any property in relation to which the debt is due or is likely to become due, and the creditor subsequently becomes entitled to take, and takes, possession of the property, the creditor shall hold the property at the disposal of the debtor for a period of three months after the taking of possession and the debtor may, during that period, dispose of the property subject to his paying to the creditor all amounts owing by him to the creditor under the contract or agreement.

Bankruptcy or winding-up proceedings.

9. Where a petition for the sequestration of the estate of any debtor or for the winding-up of a company by a court has, whether before or after the commencement of these Regulations, been presented to any court, and it is proved to the satisfaction of the court that the inability of the debtor or company to pay his or its debts is due to circumstances attributable to the war, the court may in its absolute discretion after considering all the circumstances of the case and the position of all the parties, at any time stay the proceedings under the petition for such time and subject to such conditions as the court thinks fit.

Functions of tribunal.

10. In dealing with any application under these Regulations the tribunal shall, in relation to any mortgage, consider—

(a) whether, by reason of the wasting nature of the security or of the absence of sufficient margin between the amount of the debt and the value of the security, the mortgagee is likely to be prejudiced by the granting of the application;

(b)whether the mortgagor is able to perform any or all of the covenants contained or implied in the mortgage;

(c) whether the conduct of the mortgagor in respect of the breach by him of any covenant contained or implied in the mortgage, in respect of any dealing with the mortgagee, has been such as to render him undeserving of relief under these Regulations;

(d)whether the refusal of the application would inflict great hardship on the mortgagor or the granting of it would inflict great hardship on the mortgagee; and

(e) whether the granting of the application would be reasonably likely to enable the mortgagor, having regard to his circumstances, to meet his liabilities under the mortgage within a reasonable time.

Rescission or revocation of orders.

11.—(1.) Where a tribunal or a court has made an order in pursuance of these Regulations, or the Regulations repealed by these Regulations, a creditor affected by the order may make application to the tribunal or court for the rescission or variation of the order.

(2.) The tribunal or court may, if it thinks fit, on any such application, rescind or vary the order, or make any order which it might have made in the first instance.

(3.) The tribunal or court shall not rescind or vary any order or make any order in pursuance of this regulation unless it is satisfied that in all of the circumstances of the case it is inequitable that the order previously made should continue in force either at all or without variation.

Order of tribunal final.

12. Subject to the last preceding regulation, the order of the tribunal determining any application under these Regulations, or the Regulations repealed by these Regulations, shall be final, and no order, whether interlocutory or final, in the matter of any such application, and no other proceeding under these Regulations, or under the Regulations so repealed, shall be appealed against, questioned or reviewed in any manner whatsoever, or be restrained or removed by prohibition, injunction, certiorari or otherwise howsoever.

Period of postponement, &c, not to be taken into account for the purposes of any statute of limitations.

13. In calculating the time fixed by any statute of limitations or any Act, State Act or law of any Territory of the Commonwealth in which any action may be commenced or other remedy pursued, account shall not be taken of any period during which the payment of any debt or portion of any debt or interest on any debt or portion of any debt is postponed or during which any proceedings, or proposed proceedings, are stayed, prohibited or suspended, in pursuance of these Regulations or the Regulations repealed by these Regulations.

Penalty for disposal of assets by debtor while application pending.

14. A debtor who has made an application to a tribunal for relief under these Regulations or the Regulations repealed by these Regulations shall not, pending the determination of the application by the tribunal dispose of any of his assets without the leave of the tribunal except in the ordinary course of business.

Notice to certain officers.

15.—(1.) Upon the receipt of any such application, and upon an order being made by the tribunal on any such application, the Registrar of the tribunal shall forthwith notify the respective officers of the State or Territory of the Commonwealth charged with the registration of land and securities that the application or order has been made.

(2.) Every such officer may keep a register of applications and orders which shall be open for inspection by any member of the public.

(3.) The register kept in pursuance of this regulation may be a continuation of a register kept in pursuance of the Regulations repealed by these Regulations.

(4.) The officer keeping the register may demand and recover a fee of Two shillings and sixpence in respect of each inspection of the register.

Orders by Minister.

16. The Attorney-General may by order published in the Gazette make provision for or in relation to the making of applications under these Regulations and the matters to be specified in such applications.

Validation.

17.—(1.) Subject to this regulation, no transaction, action, execution, process or proceeding shall be invalidated by reason only that it has been entered into, commenced, proceeded with or put in force in contravention of these Regulations or the Regulations repealed by these Regulations, but nothing in this regulation shall affect the liability of any person to a penalty in respect of any such contravention.

(2.) The appropriate Court may, on the application of the Attorney-General or of any person interested, make an order that a transaction, action, execution, process or proceeding entered into, commenced, proceeded with or put in force in contravention of these Regulations, or the Regulations repealed by these Regulations, shall be invalidated, but the Court shall not make any such order if the Court is satisfied that the effect of the order (if made) would be to prejudice the rights of a person in respect of, or arising out of, the transaction, action, execution, process or proceeding which have been acquired bona fide and without notice of the contravention.

(3.) In this regulation “the appropriate Court” means the High Court, or the Supreme Court of the State or Territory of the Commonwealth in which the transaction, action, execution, process or proceeding was entered into, commenced, proceeded with or put in force.

Validation of past transactions, &c.

18.—(1.) Where any assets have, prior to the thirtieth day of January, 1941, been disposed of in contravention of regulation 11 of the National Security (Debtors’ Relief) Regulations (being Statutory Rules 1940, No. 236), the transaction by which they were disposed of shall be as effectual, and the rights, powers and remedies of any person thereunder shall be the same, as if the assets had not been disposed of in contravention of that regulation.

(2.) Where any action, execution, process or proceeding has, prior to the twelfth day of May, 1941, been commenced, proceeded with or put in force in contravention of regulation 3 of the National Security (Debtors’ Relief) Regulations (being Statutory Rules 1940, No. 236, as amended by Statutory Rules 1941, No. 19), the action, execution, process or proceeding shall be as effectual and the rights, powers and remedies of any person thereunder shall be the same as if the action, execution, process or proceeding had not been commenced, proceeded with or put in force in contravention of that regulation.

 

By Authority: L. F. Johnston, Commonwealth Government Printer, Canberra.