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Local Government Act 1974

Divestment of land drainage schemes and water race schemes - Implementation of transfer plan

517ZA: Further provisions relating to transfer of scheme assets and scheme liabilities

You could also call this:

"Rules about transferring assets and debts to a scheme owner"

Illustration for Local Government Act 1974

When a local authority transfers assets or liabilities to a scheme owner, you need to know that this transfer does not mean the local authority has broken any contracts or laws. The local authority is still responsible to other people, even if the assets or liabilities have been transferred. If the local authority is held liable, the scheme owner must help pay for this liability.

If assets or liabilities are used for other schemes, the scheme owner must help pay for the part of the liability that belongs to the other scheme. You can find more information about how this transfer works in section 517Z.

If the scheme owner pays a debt or fulfils an obligation, you are considered to have paid the debt or fulfilled the obligation as well, because you are the local authority. If someone else pays a debt or fulfils an obligation to help the scheme owner, you also benefit from this payment, because you are the local authority.

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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=DLM421590.

Topics:
Government and voting > Local councilsHousing and property > Land use
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517Z: Transfer by local authority of scheme assets and scheme liabilities, or

"When a council gives a land scheme to someone else, they also give them the scheme's belongings and responsibilities."

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517ZB: Rates and charges payable for proportionate part of year in certain circumstances, or

"Paying for part of the year's rates and charges when a scheme is transferred"

Part 29ADivestment of land drainage schemes and water race schemes
Implementation of transfer plan

517ZAFurther provisions relating to transfer of scheme assets and scheme liabilities

  1. Nothing in this Part—

  2. is to be regarded as placing the local authority, the scheme owner, or any other person in breach of contract or confidence or as otherwise making any of them guilty of a civil wrong; or
    1. is to be regarded as giving rise to a right for any person to terminate or cancel any contract or arrangement or to accelerate the performance of any obligation; or
      1. is to be regarded as placing the local authority, the scheme owner, or any other person in breach of any enactment or rule of law or contractual provision prohibiting, restricting, or regulating the assignment or transfer of any property or the disclosure of any information; or
        1. releases any surety wholly or in part from all or any obligation; or
          1. invalidates or discharges any contract or security.

            1. Where a scheme asset or scheme liability is transferred to the scheme owner under section 517Z, the local authority remains liable to any third party as if the asset or liability had not been so transferred and in any such case the scheme owner must indemnify the local authority in respect of any liability arising under this situation.

            2. Where—

            3. any scheme assets held or used by a local authority are held or used for the purposes of, or in relation to, any other land drainage scheme or water race scheme vested in the local authority; or
              1. any scheme liabilities are incurred by a local authority for the purposes of any other land drainage scheme or water race scheme vested in the local authority,—
                  1. the scheme owner must indemnify the local authority for that proportion of the liability which represents the share of the land drainage scheme or water race scheme in any such scheme asset or scheme liability.

                1. Any satisfaction or performance by the scheme owners in respect of the asset or liability is deemed to be also satisfaction or performance by the local authority.

                2. Any satisfaction or performance in respect of the asset or liability by any third party to the benefit of the scheme owner is deemed to be also to the benefit of the local authority.

                Notes
                • Section 517ZA: inserted, on , by section 11 of the Local Government Amendment Act (No 5) 1999 (1999 No 125).