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Local Government Act 2002

Planning, decision-making, and accountability - Borrowing and security - Miscellaneous provisions

121: The Crown not liable for debts

You could also call this:

"The Government does not have to pay debts owed by local councils or water services companies, except in special cases."

Illustration for Local Government Act 2002

The Crown is not responsible for paying debts of local authorities or Watercare Services Limited. You need to know that local authorities include councils and other local government organisations. The Crown is also not responsible for paying debts of Watercare Services Limited, which is a company that manages water services.

The Crown is not liable for these debts, but there is an exception. If a debt is of a kind described in section 49 of the Public Finance Act 1989, then the Crown may be liable. This means that in certain situations, the Crown may have to pay a debt, but only if it is a specific type of debt.

You should be aware that the Crown's liability is limited to certain types of debts, and it is not responsible for all debts of local authorities or Watercare Services Limited.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM172905.

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Government and voting > Local councilsEnvironment and resources > Town planning
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Part 6Planning, decision-making, and accountability
Borrowing and security: Miscellaneous provisions

121The Crown not liable for debts

  1. The Crown is not liable to contribute to the payment of any debts or liabilities of—

  2. any local authority; or
    1. Watercare Services Limited.

      1. Subsection (1) does not apply in relation to liability for any sum of a kind described in section 49 of the Public Finance Act 1989.

      Compare
      Notes
      • Section 121(1): replaced, on , by section 98 of the Local Government (Water Services Preliminary Arrangements) Act 2024 (2024 No 31).
      • Section 121(2): amended, on , by section 37(1) of the Public Finance Amendment Act 2004 (2004 No 113).