Posted on August 30, 2016 by Stuart Simington

Update: Recovery of development servicing charges as fees for service

The Court of Appeal has upheld the earlier decision of the Land and Environment Court that Council water supply authorities may require development servicing charges (DS Charges) to be paid as a fee for services under s608 of the Local Government Act 1993 (LG Act) as an alternative to requiring them to be paid as a precondition to the issue of a certificate of compliance under the Water Management Act 2000 (WM Act).

We previously blogged about  Pepper J’s decision in Nash Bros Builders Pty Ltd v Riverina Water County Council (No 2) [2015] NSWLEC 156 here.

The Court of appeal has now confirmed that the regime for levying DS Charges under the WM Act does not mean that the general power under s 608(1) of the LG Act is to be read down to exclude the power to levy DS Charges as a fee for service : see Nash Bros Builders Pty Ltd v Riverina Water County Council [2016] NSWCA 225.

Amongst other things, the Court of Appeal was satisfied that the provision of headworks for water supply was the provision of a ‘service’.

The Court was also unconcerned that there was any practical risk of Council’s engaging in double dipping particularly given the requirement that the fee for a service has to be set in accordance with the pricing methodologies contained in the water supply authority’s operational plans.

As we previously identified, the benefit of the decision for councils is that if there is no opportunity to impose a condition requiring a certificate of compliance, or council has simply failed to do so, then DS Charges can still be recovered, simply by issuing an invoice. Council could take legal action to recover the amount in the invoice if the DS Charges are not paid.

To do so, councils exercising powers as a water supply authority should include the pricing methodology for DS Charges in their development servicing plan as well as specifying it as the methodology of a fee for service in its operational plan.