Water Act 2000

This section applies if—

immediately before a water authority incurs a debt—

there are reasonable grounds to suspect the authority will not be able to pay all its debts as and when they become payable; or

there are reasonable grounds to suspect that, if the authority incurs the debt, it will not be able to pay all its debts as and when they become payable; and

the authority is, or later becomes, unable to pay all its debts as and when they become payable.

A person who is a director of the authority, or takes part in the authority’s management, at the time the debt is incurred commits an offence.Maximum penalty—100 penalty units or imprisonment for 1 year.

In a proceeding against a person for an offence against this section, it is a defence if it is proved—

that the debt was incurred without the person’s express or implied authority or consent; or

that, at the time the debt was incurred, the person did not have reasonable cause to suspect that—

the authority would not be able to pay all its debts as and when they became payable; or

if the authority incurred the debt, it would not be able to pay all its debts as and when they became payable; or

the person took all reasonable steps to prevent the authority from incurring the debt; or

for a director—the person did not take part at the time in the authority’s management because of illness or for some other good cause.