Posted on May 6, 2011 by Stuart Simington

Court confirms that council fees may exceed actual costs

The Court has confirmed that councils may charge fees for service that exceed the council’s costs of providing the service.

Meriton Apartments argued that Sydney City Council could not charge more than its actual or direct costs of providing on-street work zones but Pepper J rejected that argument: Meriton Apartments Pty Limited v Council of the City of Sydney (No 3) [2011] NSWLEC 65.

The decision is an orthodox¬† interpretation of s610D(2) of the Local Government Act 1993 which makes it clear that ‘[t]he cost to the council of providing a service in connection with the exercise of a regulatory function need not be the only basis for determining the approved fee for that service‘.

Pepper J accepted that fees could take account of factors such as the indirect cost to the council of providing the service and the cost to the community.

Pepper J also rejected the argument that this was inconsistent with the Council’s charter, in particular¬† ‘to raise funds for local purposes by the fair imposition of rates, charges and fees‘.