173—Bankruptcy or assignment of lessee
(1) In any case where
the registered proprietor of a lease has heretofore, or shall hereafter,
become bankrupt, or has heretofore made or shall hereafter make, a statutory
assignment—
(a) If
lease not subject to mortgage or encumbrance
if the lease is not mortgaged or encumbered under this Act, the
Registrar-General must, on the application in writing of the lessor (being a
lessor in possession of a statement, signed by the Official Receiver, or by
the trustee under the bankruptcy or assignment, certifying his or her refusal
to accept the lease), make a record in the Register Book of the refusal, and
the record will then operate as a surrender of the lease;
(b)
Mortgagee or encumbrancee of the leasehold interest of a bankrupt or assignor
may be entered as transferee of a lease
if such lease be mortgaged or encumbered, the Registrar-General shall, upon
the application in writing of any mortgagee or encumbrancee, accompanied by a
statement in writing signed by the Official Receiver, or the trustee under
such bankruptcy or assignment, certifying his refusal to accept such lease, or
by proof that the Official Receiver or trustee has neglected or refused to
certify such refusal or to become registered as proprietor of such lease
within one month after being thereunto required by notice in writing given to
him by the mortgagee or encumbrancee, enter in the Register Book a note of
such refusal or neglect, and such entry shall operate as a foreclosure, and
the estate or interest of the bankrupt or assignor in such lease shall
thereupon vest in such mortgagee or encumbrancee, free from all other charges
subsequent to his mortgage or encumbrance, and such mortgagee or encumbrancee
shall thereupon be deemed to be the registered proprietor of such estate or
interest, and shall, while he remains such registered proprietor, be subject
to and liable for the same requirements and liabilities to which he would have
been subject and liable if named in the lease originally as lessee;
(c)
Protection to subsequent mortgagees and encumbrancees
no such entry shall be made unless it be proved to the satisfaction of the
Registrar-General that the applicant mortgagee, or encumbrancee, has given
fourteen days' notice in writing of his intended application to every
subsequent mortgagee or encumbrancee of the lease, or has obtained his written
consent; and any such subsequent mortgagee or encumbrancee shall be entitled
to pay to the applicant mortgagee or encumbrancee the amount due to him under
his mortgage or encumbrance, with costs, at any time before foreclosure, and
shall thereupon be entitled to a transfer from him of such mortgage or
encumbrance;
(d)
Where Official Receiver, trustee, and mortgagee neglect to become proprietors
if the Official Receiver or the trustee under the bankruptcy or assignment
shall certify his refusal to accept the lease, or shall neglect or refuse to
become registered as proprietor of the lease, within, one month after having
been thereunto required by notice in writing given to him by the lessor, and
the mortgagees or encumbrancees (if any) of the lease shall neglect or refuse
to have an entry operating as a foreclosure made in the Register Book under
the provision in that behalf hereinbefore contained within the period of two
months after having been thereunto required by notice in writing given to them
by the lessor, the Registrar-General shall, upon the application in writing of
the lessor, and, upon proof of such certificate or such neglect or refusal as
aforesaid, enter in the Register Book a note of such neglect or refusal, and
every such entry shall operate as a surrender of such lease.
(2) A lessor,
mortgagee or encumbrancee must retain a copy of any document used for the
purpose of fulfilling his or her obligations under subsection (1) for the
period prescribed by the regulations.
Maximum penalty: $10 000 or imprisonment for 2 years.