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Crown Entities Act 2004

Establishment and governance of Crown entities - Statutory entities - Validity of acts

20: Some natural person acts protected

You could also call this:

"Some things you do with a government organisation are okay, even if they're not perfectly legal."

If you deal with a statutory entity, you can enforce a transaction that is a natural person act. This is unless you knew, or should have known, that the act was against the law or not for the purpose of the entity's functions. You can check the rules in section 19 to see what this means.

When you rely on this rule, you have to prove that you did not know, and should not have known, about the issues with the act. This is an important part of using this rule to enforce a transaction.

A statutory entity has to report on any transactions that were invalid under section 19 but were still enforced. This report is part of the entity's annual report and helps keep track of these transactions.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM329935.

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19: Acts in breach of statute are invalid, or

"Breaking a law or doing something wrong makes an action invalid, but a court can still help."

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21: Limits on protection of natural person acts, or

"When working for a Crown entity, there are limits to how much you're protected from being sued."

Part 2Establishment and governance of Crown entities
Statutory entities: Validity of acts

20Some natural person acts protected

  1. Section 19, or any rule of law to similar effect, does not prevent a person dealing with a statutory entity from enforcing a transaction that is a natural person act unless the person dealing with the entity had, or ought reasonably to have had, knowledge—

  2. of an express restriction in an Act that makes the act contrary to, or outside the authority of, the Act; or
    1. that the act is done otherwise than for the purpose of performing the entity's functions.

      1. A person who relies on subsection (1) has the onus of proving that that person did not have, and ought not reasonably to have had, the knowledge referred to in that subsection.

      2. A statutory entity must report, in its annual report, each transaction that the entity has performed in the year to which the report relates that was invalid under section 19 but enforced in reliance on this section.

      3. For the avoidance of doubt, this section does not affect any person's other remedies (for example, remedies in contract) under the general law.