Plain language law

New Zealand law explained for everyone

Local Government Act 2002

Planning, decision-making, and accountability - Borrowing and security - Protected transactions

119: Good faith in relation to protected transactions

You could also call this:

“Rules about honesty in special deals with local councils”

You should know that sections 117 and 118 still apply even if someone acts dishonestly or fakes a document that looks like it’s from the local authority. This is true unless you’re dealing with the local authority in bad faith.

You can’t use section 117 or 118 for a protected transaction if you’ve dealt with the local authority in bad faith for that transaction. You also can’t use these sections if you knew that the transaction was breaking section 113 before it happened.

When thinking about good faith, it’s important to know that you’re not automatically acting in bad faith just because you knew or should have known about the situations mentioned in section 117. Also, you’re assumed to be acting in good faith unless someone can prove otherwise.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM172902.

Topics:
Government and voting > Local councils
Crime and justice > Criminal law
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Part 6 Planning, decision-making, and accountability
Borrowing and security: Protected transactions

119Good faith in relation to protected transactions

  1. Sections 117 and 118 apply even though a person of the kind referred to in section 117(c) or section 117(d) or section 118 acts fraudulently or forges a document that appears to have been signed on behalf of the local authority, unless the person dealing with the local authority or a person who had acquired property, rights, or interests from the local authority acts in bad faith.

  2. A person may not rely on section 117 or section 118 in relation to a protected transaction if that person—

  3. has dealt in bad faith with a local authority in relation to the protected transaction; or
    1. had actual knowledge before the protected transaction was entered into that it was in breach of section 113.

      1. For the purpose of subsections (1) and (2),—

      2. a person is not regarded as acting in bad faith by reason only of the fact that, in relation to any protected transaction, the person knew or ought to have known of the existence of any of the states of affairs referred to in paragraphs (a) to (d) of section 117; and
        1. a person must be presumed to have acted in good faith unless the contrary is proved.

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