Local Government Act 1993

If a council proposes to issue debentures or inscribed stock for the purpose of raising money, it must – assign a distinguishing classification to the debentures or inscribed stock to be included in the issue so as to distinguish them from those included or to be included in previous or subsequent issues; and appoint a trustee for the holders of the debentures or inscribed stock if the debentures or stock are being offered generally to members of the public.

The holders of debentures or inscribed stock of a particular classification rank equally and have priority over the holders of debentures or inscribed stock included in a subsequent issue.

If a council defaults in carrying out its obligations under a loan secured by debentures or inscribed stock charged on the general revenue of the council, the Supreme Court may, on the application of a creditor or trustee for the holders of the debentures or inscribed stock – direct the council to appropriate a specified portion of its revenue to the satisfaction of its obligations under the loan; or require the council to raise a specified amount by way of rates and order that the amount raised be applied towards satisfaction of the council's obligations under the loan; or give such other directions as are necessary or desirable.

The rights of the creditor or trustee under subsection (3) are in addition to any other right that exists independently of that subsection.

In this section, debenture includes any form of charge on the general revenue of a council.